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So, is it Smart to Buy a Home in 2021?

You might assume that a real estate move is off the table for the unpredictable year ahead. After all, buying a home during a coronavirus pandemic could mean risking a tentative job market, economic uncertainty and even restrictions on viewing a property, right? Not so fast. The beauty of a long-term, 15- to 30-year investment is that you can ride out the storms along the way. Depending on your financial circumstances, 2021 could be the year to invest in your dream home. Lets dig deeper into the pros and cons of buying one now.

These Timeless Real Estate Truths Apply

Yes, were in a pandemic. No, were not in a housing bubble. As yet, no one is sounding an alarm over an overheated housing market teetering on the brink of collapse. In fact, the future is surprisingly bright and the path to home ownership is still relatively smooth. Housing is a major cost whatever the economic climate, and there is always a strong case for investing in property rather than renting. 

Currently, the average U.S. mortgage payment is just over $1,500 a month, slightly higher than the average monthly rent of $1,476. But while the cost difference between the two is negligible, the advantages of ownership over renting are important for many: greater financial security; accumulation of equity; and a strong sense of community. Whatever the economic climate, there is one constant truth: If you can save the down payment, have a reasonable credit score and can secure a favorable interest rate, it is prudent to buy a home rather than rent.

Why Buy a Home in 2021?

Homebuyers today can take advantage of the lowest interest rates in history. The Federal Home Loan Mortgage Corporation better known as Freddie Mac  30-year loan fell to a record low of 2.8 percent in 2020. That may shout no-brainer, but its not just about the interest rate. But, the real estate market forecasts for 2021 highlight some exciting opportunities that have come out of the crisis.

1. New frontiers

The shift to working from home, whether it turns out to be permanent or not, is driving interest in new areas. Several industry reports have identified Dallas-Fort Worth and Austin as top 10 hotspots for 2021.

2. Exodus to the suburbs

Because were at home more, were looking for bigger, smarter homes away from conventional commuting hubs, particularly in rural or suburban areas. Weve written previously about the renewed interest in ranches and land, too.

3. A touch of luxury

Now is the time to invest in smarter homes  and with a wider range of amenities suited to remote working  while interest rates are low. Splashing out on a few extras is less of an indulgence when the lines are blurred between your personal and professional life. 

4. Second-home opportunities

For current homeowners, 2021 presents a great opportunity to leverage capital, rising house prices and low borrowing rates to invest in a second home, or to upsize to a bigger property. With ownership, a cost today translates into greater net worth down the line. 

Reasons to Be Careful

Lets point out that, right now, were in a sellers market. Demand for available housing is extremely high, with the average home in Texas on the market for just 48 days, a record low. In the luxury sector, were seeing multiple offers in mere hours from hitting the market. Whats more, prices are on the rise and expected to continue. The median Texas house price is $273,000, a rise of 12 percent year-on-year, and much higher in metropolitan areas. 

With that in mind, hitching your wagon to the property express might not be prudent if your savings are modest or your long-term employment prospects fragile. Instead of locking up vital savings in a down payment, or leaving yourself overstretched with high payments for a monthly mortgage, maintenance and property taxes, be patient until youre 100-percent comfortable with buying a home. 

Your Next Move?

While 2020 championed resilience in the face of adversity, 2021 belongs to the bold. This could be the year to make your move and seize a rare opportunity  if your financial portfolio entered the New Year in healthy condition. Texas real estate is also in good health, with more than a third of homes owned free and clear a higher rate than the national average. If, on the other hand, youre particularly anxious about your prospects for the year ahead, prioritize reducing any debt and restoring or building up savings. Given that many Texans are behind on their mortgage payments, possibly with further hardship to come, it would hardly be prudent to take on unnecessary financial commitments in a pandemic, where the risks outweigh the potential benefits. 

Need advice? Any one of our expert team of agents is happy to discuss your real estate possibilities in 2021 and offer transparent, truthful guidance on whether buying a home this year is right for you.

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