The real estate market is expected to continue growing in 2021 according to experts. It is mainly driven by the lasting impact that the pandemic is having on our lifestyles. As we are now used to spending extra time at home, we’re reevaluating what “home” means and what we may need in one going forward.

These are the 4 reasons people are reconsidering where they live and why they’re expecting to buy a home this year.

1. Record-Low Mortgage Interest Rates

The average interest rate for a 30-year fixed mortgage hit a record low 16 times in 2020, and this continues to fall further below 3%. As per Freddie Mac, the average 30-year fixed interest rate today is 2.65%. Many wonders how low these rates will go and how long they’ll last. Len Keifer, Deputy Chief Economist for Freddie Mac, advises:

“If you’ve found a home that fits your needs at a price you can afford, it might be better to act now rather than wait for future rate declines that may never come and a future that likely holds very tight inventory.”

This sense of urgency is driving many to buy this year.

2. Working from Home

The new normal for many businesses nowadays is remote work, and is expected to last longer than most expected. Most of the workforce today discovers that they don’t need to live close to the office anymore and that they can get more for their money by moving a little further outside of the city limits. David Mele, President at Homes.com, says:

“The surge in the work-from-home population has rewritten the playbook for many homebuying and rental decisions, from when and where to relocate, to what people are looking for in their next residence.”

The truth is, for some people, working remotely in their current home is challenging, most especially when there may be other options that are available.

3. More Outdoor Space

One of the new priorities for homeowners is having more usable outdoor space. Staying at home is driving those in some areas to seek less densely populated neighborhoods that will give them more room to stretch their legs. Also, those who are living in apartments and townhomes tends to often look for an extra square footage, both inside and out.

According to the State of Home Spending report by HomeAdvisor, of the households surveyed, almost half reported spending 27% more on outdoor living over the past year. This is a trend that’s expected to grow in 2021 and beyond.

4. Avoiding Renovations

Another new realization that came to many homeowners, is to buy a new home rather than go through the process of fixing up the one they have. According to the 2020 Profile of Home Buyers and Sellers report from the National Association of Realtors (NAR), 44% of homebuyers purchased a new home to “avoid renovations or problems with the plumbing or electricity.”

Depending on what needs to be addressed, the high buyer demand nowadays may make it possible to skip some renovations before selling. A lot of these homeowners have prioritized buying over renovating for convenience and potential cost savings.

Bottom Line

With this, it was made clear that homeownership needs are changing. Because of that, Americans are expected to move in record numbers this year. If you’re trying to decide if now is the right time to buy a home, do not hesitate to talk to a local real estate professional today to discuss your options.

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