Low Mortgage Rates Benefit Many — Not Just Buyers

Mortgage rates are continuing to hold below 3% this spring. Rates were at record-breaking lows throughout most of 2020, during the unprecedented real estate market during the global pandemic. After rising a fraction in early 2021, the rates for a 30-year mortgage were averaging at 2.98%  on April 29, 2021. It’s natural to see homebuyers as reaping the real benefits from this. But consider others who benefit … even if you are not in the market for a new home, you could benefit from these low rates.

Advantage for buyers

It’s obvious that homebuyers are the most directly benefiting from the low interest rates. Says Realtor.com® Chief Economist Danielle Hale, “Today’s mortgage rates give home buyers a much needed boost in purchasing power that will help them navigate higher home prices, which nearly every housing market across the country is seeing right now.” Perhaps reluctant would-be homebuyers are actually ready to act now in response to the lower interest rates. With the usual springtime increase-in-inventory, the market is turning a little more friendly to buyers the coming months.

Now is also a great time for 2nd-home buyers to make their dreams come true. Even if a great purchase price bargain is hard to come by in today’s housing market, you can still lock in at a respectable low interest rate and save a lot of money in the process. If owning a beach condo has been a goal for your family, this is a great time to buy, as the market for condominiums is not quite as competitive as the market for single-family detached homes.


Advantage for sellers

The climate of today’s housing market is by far the most advantageous for the seller. Low mortgage rates spur buyer demand, plain and simple. The more buyers, the more bidding wars and the higher the sales prices go. This also gives more negotiating power to the seller. 

Houses are on the market for a shorter time right now, with the average days on the market (DOM) being 18, as compared to the average over the last few years being 35-50, depending on the city. Higher DOM can make buyers wonder what’s wrong with the home, and after a few weeks, as interest drops, the appeal of the home drops. 


Advantage for the homeowner not planning to sell 

Lower rates are a positive incentive for refinancing, which can reduce monthly mortgage payments.  An increase in the homeowner’s equity can result, as well as the possibility of eliminating the pesky mortgage insurance.

All this can enhance a homeowner’s overall financial status. Quoted on the CNBC.com website, Matt Schulz, chief credit analyst for LendingTree says, “One of the best things Americans can do right now is build up their savings while trimming their debt.” When any loan balance is high compared to the original borrowed amount, credit scores are lower. Eliminating debt leads to financial security and peace of mind.

Even an advantage for renters

Landlords may take advantage of refinancing their rental property, which can lower their monthly payment and thus eliminate the need for increased rents during the hard times of the pandemic.

Many Americans are purchasing rental properties, taking advantage of the low interest rates. This makes more homes and apartments available to renters. “There’s just been extraordinary demand for rental homes in a lot of these secondary cities, tertiary cities, suburban markets, where a lot of the single-family rental properties are located,” said Gary Beasley, CEO of Roofstock, a marketplace for buying and selling single-family rental properties. According to an article on money.com, large portion of rental purchasers are first-time investors and many of those are moving from renter to landlord. Many of these properties become short-term rentals, through Airbnb or VRBO platforms. Since the onset of the pandemic, there seems to be a move away from hotels and motels and a trend of vacationers choosing detached homes, or condominiums, which don’t require as many close physical interactions during the vacation stay.


What’s next?

Mortgage rates are inching upward monthly. March saw the first dramatic increase over the previous 12 months, but the trajectory has slowed back in the last month. Rates are expected to stay below 3.20%, which is still a relatively low rate compared to the last few years. 2021 looks to be a safe time to make that home purchase, or secondary home purchase. Still, it’s good to keep in mind, the market is volatile, and speculation is just that. But home value growth is sure to remain in 2021.



If you are interested in selling or buying a home, I’d love to be of help as your Harry Norman Realtor. As a seller listing your home with me, you can be assured that your home will have the best market exposure. Harry Norman properties are featured on thousands of real estate websites visited by millions of qualified viewers. No other Atlanta residential real estate brokerage offers greater local, national, and international exposure. We are relocation specialists, so your home will be marketed not just to local Georgians, but specifically to the thousands of buyers relocating to the Atlanta area. We will present your home in the best light, with an eye toward the shortest time on the market and the best selling price. As a buyer’s agent with Harry Norman, I will work closely with you, taking in to account your specific and individual needs in the home buying process and I will be your exclusive advocate. It is to your advantage as a buyer, especially in this erratic market, to have a realtor who can make sure your offer stands out from the others, and that the contract is aligned with your best interests.

If you have questions about your neighborhood housing market trends, or are interested in buying or selling, I’d love a chance to chat with you about it all. Please contact me via email at ElizabethKay.Pinder@HarryNorman.com so we can set up an in-person or phone appointment.

Elizabeth Kay Pinder, Realtor ~ Harry Norman, REALTORS ~ 404-394-4646, mobile ~ 404-394-2131, office ~ ElizabethKay.Pinder@HarryNorman.com ~ ElizabethKayPinderWeb.HarryNorman.com

Sources

https://www.cnbc.com/2021/04/28/the-fed-keeps-rates-near-zero-heres-how-you-can-benefit.html

https://www.realtor.com/news/real-estate-news/mortgage-rates-drop-home-prices-rise/

https://www.opendoor.com/w/blog/why-days-on-market-matter

https://money.com/historic-low-mortgage-rates-new-investment-property/

It’s a nice place to share

Last year on the cusp of an Empty Nest, I decided to pursue a real estate license — and after I got my license, a dear friend connected me with her broker at Harry Norman, Realtors®, which I joyfully joined. So through my training and acclimation to this new world I found out that a blog is a great place to showcase my interests and add value to other people’s lives at the same time. I hope I can connect with people through this blog and through Harry Norman, Realtors®. I am excited about my career and creating new relationships. And I am feeling a heap of gratitude for my family and my longtime friends who have encouraged me along. 

This is a nice place for me to put down my ideas and projects and share the photographs I’ve taken. I enjoy sharing these things and hope that they may inspire someone to do something fun and creative and meaningful. The kinds of things I enjoy are “lifestyle”-oriented, I suppose — cooking, baking, enhancing and improving my home and my yard. I love getting great photos of these things, plus I love taking photos of people and places. I hope to share the things that matter to me — my home projects, adventures in my kitchen, great restaurants, travel, things relating to my interests in the arts — music, art, dance, theater — and community events in Peachtree Corners and metro Atlanta. I also occasionally enjoy a great Atlanta United soccer match!

Websites are such fun places to visit. It is awesome be part of a bigger, diverse community and share my ideas, creations, and interests!   

After spending the last 26 years taking care of my children, I am ready to look outward now and see where my abilities and talents can lead me. My husband and I homeschooled our children throughout their lives (they are 25, 22, and 18 at this writing). I learned a great deal over those years: I learned about the fulfillment of putting others first, I learned how to search for what you need, and how to create what you couldn’t find. I know now that I am a great facilitator and manager — and also that I will always love reading — fiction, non-fiction, and storybooks and picture books — and that our relationships with the arts can make a difference in how we get through life. I learned all about having authentic gratitude for the people I love and the life I live.