Record-low interest rates are opening the door to a new generation of homeowners.
Realtor.com’s 2020 Housing Forecast predicted that millennials would be on the move this year and take more than half of all mortgages in 2020.
The initial forecast, released in December 2019, predicted that mortgage rates were likely to increase to 3.88% by the end of the year. In response to market changes precipitated by the COVID-19 pandemic, the group released an updated forecast in May 2020 predicting that mortgage rates will remain low and slide under 3% by the end of the year.
Low interest rates mean lower monthly payments and less money going toward interest.
This is great news for millennials – those currently aged 23-39 – who are in their prime home-buying years, may be starting a family, and are likely working from home.
Some would-be sellers remain hesitant in the pandemic present, so housing inventory is low, which is driving significant competition – especially in the entry-level price segment. Many sellers are fielding multiple bids and closing above the asking price.
The updated forecast predicts that the rate of decline in inventory will steady by year-end and the market will see greater availability in lower-priced homes. We’ll also see an increased interest in the suburbs as buyers seek affordability and space.
Record-low mortgage rates and increased inventory of lower-priced homes mean that those who were previously unable to purchase a home may now be able to become homeowners.
VLFCU has some pretty clever online tools to help you make your decision, too. Our Financial Empowerment Program about Owning a Home can help you prepare for the home-buying process. Through this program, you’ll:
- Discover the types of mortgages available, including conventional mortgages, second mortgages, FHA loans, VA loans and vacation home loans.
- Learn the factors that can impact your mortgage.
- See how loan amounts, interest rates, purchase points, and fees affect your final mortgage agreement.
When you’re ready, our team of mortgage professionals will guide you through the entire loan process. Contact one of our Mortgage Lending Officers to get started on your mortgage loan pre-approval today!