The past year has been a whirlwind for the housing market in a good way. There has been a boom in sales as seen in pending home sales up the highest level of sales for May since 2005. According to the National Association of Realtors, May 2021 was up 8% compared to April 2021 and 13% from the sales in May 2020.

“May’s strong increase in transactions – following April’s decline, as well as a sudden erosion in home affordability – was indeed a surprise,” said Lawrence Yun, NAR’s chief economist. “The housing market is attracting buyers due to the decline in mortgage rates, which fell below 3%, and from an uptick in listings.”

All four regions saw an increase in pending home sales in May. The Northeast had a 15.5% increase, the Midwest climbed 6.7%, the South rose 4.9% and the West increased to 10.9% month over month.

Although the market is still hot, weekly mortgage demand did take a 7% downturn in May 2021.

“While these hurdles have contributed to pricing out some would-be buyers, the record-high aggregate wealth in the country from the elevated stock market and rising home prices are evidently providing funds for home purchases,” Yun said.

The could have stemmed from the home price increases. The S&P Case-Shiller National Home Price Index rose 14% year over year in April 2021. This increase was the largest gain in its 30-year history. The median home price has also increased which has made it harder for first-time homebuyers.

Click Here For the Source of the Information.

The housing market is hot right now and there are more buyers than there are homes to purchase. The housing market is booming right now because of the low mortgage rates and a recovering economy. It is reported that 8.3 million to 9.2 million first-time homebuyers will hit the market by 2022. Even though this is a hot market, it might not be the best time for your family to commit to owning a home. Below are several things to consider before diving into the responsibility of homeownership.

1. Pre-approval is a must.

Getting a pre-approval will not only relay the message that you are a serious buyer but will also give you an idea of how much you can spend on a home. When you are pre-approved a seller knows you are a serious contender and puts you above offers with no pre-approval.

“There are two main things a seller wants to know about buyers: Are they willing to pay my price and can they close a deal if we agree?” says Dale Taylor, a realtor in Chicago.

A good place to start is by using an online home-affordability calculator to see how much money you should be able to borrow. Once you have established this, check out several mortgage lenders in your area. It is a great idea to shop around for the best rates and mortgage offers. You not only want the best bang for your buck but you also want to choose a lender who is happy to help answer questions, trustworthy and easy to reach.

2. Do not let emotions make the decision.

You might take a tour of a listing and say it is love at first sight but that doesn’t mean you need to jump right in. Look at all the features of the home from a practical point of view. A home on a hill might have awesome curb appeal but might not be the best choice for families with you kids who like to roller-skate or ride their bikes.

According to Trulia.com half of all homeowners find at least one or not more things they do not like about their current home. There might be a cute three-bedroom bungalow that you love, but it might not have any closet space or back up to a busy street. Remember, always think long-term when investing in a home.

3. A home costs more than just the mortgage.

There are many more expenses than just your monthly mortgage payment. There will be real-estate taxes and homeowner’s insurance on top of your principal and interest payment. Tax Foundation states that depending on the area you live in, your property taxes will average about 1.1% of your home’s value per year. If you need $250,000 worth of insurance coverage, that will be about $1,477. You will also need to add your utilities to the monthly cost.

There are also some upfront fees you will also have to consider. You will need to set aside around 2% to 5% of the purchase price for your closing costs. A local Realtor can help you through this process.

4. There is a big difference between an appraisal and an inspection.

Banks will need an official appraisal and you will need to hire a licensed appraiser. An appraiser will give the bank a firm value of the home. An inspection will let you know if this home is a reliable purchase.

A lot of times buyers will make their contract contingent on the home inspection. A home inspector has certain criteria the home must meet to be deemed satisfactory. It is always a good idea to have a professional inspector inspect the home you are about to purchase. An inspector can make sure everything is up to code before you go through with the contract.

5. Read the whole contract.

Purchasing a home is a long-term investment and one of the biggest milestones in your life. You need to make sure everything in your contract is in order. You might look at a home love it, put it under contract, close and discover they took the refrigerator. You have to make sure everything is listed in the contract. If you do not understand any wording, ask your Realtor to explain the meaning. Make sure you are comfortable with what you sign.

If you decide to go through with purchasing a home, go through a local sales agent. A Realtor can help you find the perfect floorplan that will fit your family, in a neighborhood you are comfortable in, and in the right school district.

Click Here For the Source of the Information.