LOOKING AHEAD

What to Expect from 2021 in Housing

The real estate industry evolves every year, with new regulations, laws, technology, and trends affecting borrowers and homeowners. Realtor.com Economist Danielle Hale expects home sales to surge another 7% and home prices to rise another 5.7% above 2020 levels.

Demographics and housing supply are key pieces to continued growth. Younger Millennial and Gen-Z buyers likely will play a growing role in the housing market. Prices, and higher rates, will create barriers to entry for the many first-time buyers in these generations who haven't yet built home equity. While builders are expected to increase production for single-family homes by another 9% in 2021, the market will remain seller-friendly. Buyers will still enjoy relatively low rates and an eventually improving selection of homes for sale.

DID YOU KNOW?

38% of renters can afford to buy a home.6

PERSONAL FINANCES

Considering Borrowing Against Home Equity?

Home values are up. In keeping with the rise in the median cost of a home, the average purchase loan amount recently hit $375,000, the highest-ever since the inception of the Mortgage Bankers Association's survey in 1990. If you are looking at accessing cash in your home, consider these unique facets of a home equity loan or a home equity line of credit (HELOC) before applying:

• Determine if you have sufficient equity - at least 15% to 20%. Lenders will use equity to define how much you can borrow.
• Consider taking action to improve a credit score below the mid-600s. A higher score is more favorable when the lender sets your rate/s. Having a reliable payment history will improve your approval odds as well.
• Look at your debt-to-income ratio. Often lenders look at borrowers as lower risk when their debt relative to their income is 43% or lower. Lenders will scrutinize your income as well to make sure you'll be able to repay the loan.

Home equity loans and HELOCs usually have lower interest rates than credit cards or personal loans. They can help when you need a large amount of money to pay for home improvements, debt consolidation, or any other large expenses.7

REAL ESTATE TRENDS

Multi-Generational Homes Grew in Popularity

Last year, the pandemic fueled demand for new home features such as accommodations for older family members. For transactions completed after March, homebuyers were much more likely to purchase a multi-generational home. These homes accounted for 15% of all sales. Economic hardship, the desire to pool resources to afford more space, and the ability to see and care for family all helped to fuel this trend.8