Similar to its temperature change, the fall real estate market traditionally experiences a cooling period. With current flexible school schedules, additional indoor and outdoor space requirements, record-low interest rates, and highly motivated buyers, however, this season’s market is outpacing spring and summer transactions.
According to HousingWire, an online real estate and mortgage trends news resource: “Over the last four weeks ending on Sept. 20, the National Association of Realtors said that contract signings were up 23% year over year. There were nine new pending contracts for every 10 new listings, a slower rate than the 9.9 ratio in the past four weeks through July 5, but still impressive for a fall time period.”
We’ll examine top reasons why the fall housing market is currently hot, and why it’s the best time to finance and purchase your dream home.
1.) Pent-Up Demand
As the novel coronavirus (COVID-19) changed the way we work and socialize, it also altered how we live. With many potential homebuyers commencing their search in the spring and summer, the pandemic forced the adoption of a wait-and-see approach.
Relaxed stay-at-home mandates and restrictions, and other additional safety measures, have consumers feeling more at ease regarding person-to-person interactions.
Virtual viewing and communications have also gained a foothold. This includes everything from home tours, realtor and mortgage lender check-ins, and final closing.
Some in-person meetings might still be required, so it’s best to consult with your mortgage lender to avoid any confusion.
2.) Flexible Academic Term Schedules
With many elementary schools and institutions of higher learning implementing full-time or hybrid online learning programs, there’s no longer an urgency to find, finance, and close on a new home prior to the new school year.
These non-traditional learning models also provide more leeway when it comes to concurrently selling and purchasing a home. This includes not having to rush into a new space if your current home sells more quickly than anticipated.
3.) Highly Motivated Buyers
Historically, low interest rates are proven leading indicators of the fall homebuying boom. According to government-backed secondary mortgage lender Freddie Mac, fixed-rate mortgages as of September 2020 carried an interest rate of 2.89%.
Even in the midst of the current pandemic, demand is continuing. With COVID-19 restrictions beginning to loosen, schools reopening, and many organizations welcoming back previously furloughed employees, demand is expected to stay on par with increased consumer confidence.
It’s also important to move quickly when it comes to financing. Whether you’re a first-time homebuyer or looking to upgrade or downsize, it’s best to work with a reputable lender, who can assist with your pre-approval and mortgage process.
4.) Additional Space
Many are also realizing changing space needs. With increased remote work and distance learning, prospective buyers require more space and rooms for home offices and virtual classrooms.
COVID-19 restrictions have also increased the desire to spend more time at home, hence the requirements of larger yards and in-home amenities.
5.) Home Ownership Benefits
The aforementioned low interest rate is just one of many benefits for renters to consider homeownership. Those purchasing in the fall are also still eligible for homebuyer tax breaks during the current year. Deductions include mortgage interest, insurance premiums, and property taxes. These can also be deducted if prepaid on closing day.
You’re also likely to obtain end-of-year deals on home improvement materials, such as tiles, flooring, appliances, and other necessary items. Whether your project is a complete fixer-upper or merely involves a few cosmetic improvements, the fall offers many discounts as retailers transition to newer products.
Unlike renting, owning a home builds equity over time, especially in this currently appreciating market. With each mortgage payment, you’re creating an invaluable asset for your family’s future.
Achieving Your Dream Home
With so many options available when it comes to financing a new home, it’s best to work with an experienced mortgage lender who can walk you through the financing process—from start to finish.