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Buying a Home in Today’s Market - Fall 2021

Father and daughter talking

Buying a Home in Today’s Market - Fall 2021

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The housing market is always changing. From fluctuating interest rates to shifting supply to rising and cooling markets, it feels like you’re constantly hearing a back-and-forth between whether it’s a “buyer’s” or “seller’s” market. But, your friendly experts at Wintrust Mortgage are always here to find the perfect home for you—no matter how the market actually looks.

Throughout the summer of 2021, rates have remained low. In some cases, they’ve even fallen further compared to earlier in the year.1 Some experts believe this sustained dip is largely fueled by the housing boom, which began as a response to drastically low inventory in the housing market in 2020 and 2021. But, the other side to this coin for buyers is that rates won’t stay down forever; mortgage rates are expected to rise once this surge in demand for homes has passed.2

Even more good news for prospective buyers is that such notoriously low inventory is showing signs of alleviation. In June 2021, Realtor.com reported a 5.5% year-over-year increase in new listings, and a 10.9% bump from May.3 This, combined with the continued surge of new-home construction, strongly positions buyers for a temporarily beneficial window characterized by both relatively low rates and higher home supply. This might be the perfect opportunity to find the right home for you before rates eventually rise again.

However, many buyers are still finding that available homes on the market are either not what they’re looking for, or may be out of their budgets. In such cases, buyers still have options. 

Break ground on a new construction. Rather than house hunting, many buyers are going the route of new construction to build their dream homes, taking advantage of construction-to-permanent home loans. This offers buyers a way to secure financing for a new build, which then converts into a permanent mortgage upon completion. These loans have many benefits for buyers who want to go in this direction:

  • One set of closing costs. Most mortgages don’t cover the cost of construction, meaning a buyer has to go through the borrowing process twice. One loan saves buyers both time and money, with one set of closing costs.
  • Protect against potential changes in the market. Buyers who take on new-construction projects run the risk of a fluctuating market during the build. With a construction-to-permanent loan, the interest rate for the long-term mortgage is locked in before a buyer begins work.
  • Give buyers the homes they truly want. The ability to customize every square foot of a house gives buyers the freedom to craft their home to their liking. It also presents buyers with an opportunity to build a house based on market trends for a higher potential return on investment (ROI).

Start a home renovation project. One popular option for consumers who are either dissatisfied with their current homes or the available homes on the market, is initiating a home renovation project. From remodels to home additions, many consumers are foregoing the process of selling old and buying new in favor of fixing up what they already have, or side-stepping the scorching-hot turnkey market by purchasing a fixer-upper. Plus, many consumers don’t know that they can get prequalified for a renovation loan along with a new mortgage, so they can get started on construction faster. A Purchase + Renovate home loan from Wintrust Mortgage allows borrowers to:

  • Buy and update a home. Use your Wintrust Mortgage loan to buy a home, and also have the money to renovate it to fit your specific needs.
  • One fixed interest rate. Bundling a purchase and renovation loan allows you to get locked in at a single interest rate, so you don’t have to monitor two separate loans.
  • One set of closing costs. Save money by only paying fees on a single loan, rather than taking out two and paying double..

For buyers with veteran status, there are additional options and opportunities to help get them into the perfect homes:

Receive special benefits for U.S. veterans. The Department of Veterans Affairs (VA) offers loans with special benefits that are designed to assist in home buying for veterans. The VA Loan Program allows U.S. veterans to take advantage of the most competitive market rates while helping buyers keep monthly payments as low as possible. The VA program offers:

  • No down payment in most cases. (Unless required by the lender, or the purchase price is more than the reasonable value of the property.)
  • 100% financing on purchases, and 90% cash-out refinancing. 
  • Upfront mortgage insurance. Veterans can save money during the home-buying process by not being responsible for the cost of mortgage insurance. 
  • Larger loan amounts available. Loan amounts range from $453,100 for one-unit properties to $1,386,650 for a four-unit property, depending on county.

Homeowners have experienced massive gains in home equity in recent months, and right now could be a good time to consider buying to help secure your financial future. In the first quarter of 2021, homeowners saw a collective gain in home equity of nearly $2 trillion. Additionally, economic growth in the U.S. has proven to be on track so far with expert projections: Reuters reported that second-quarter GDP forecasts are accelerating at a rate of 8.5%, with an estimated overall annual growth of 7%, which would be the strongest performance since 1984.5  While a strengthening economy is generally seen as a good thing, it also serves as yet another signal that rising mortgage rates are likely on the horizon.

Wintrust Mortgage can find you a home no matter the circumstances of the current housing market. But, mortgage rates that are still holding extremely low compared to the last few years, reports of a turning tide in housing inventory, and a construction boom across the country all point to a smart time to at least consider making a move. Whether you’re refinancing your home, beginning a renovation project, or thinking of buying something new, Wintrust Mortgage can help you make the most out of your home.

Disclaimer: Restrictions apply. Program, rates, terms and conditions are subject to change at any time and without notice. All approvals are subject to underwriting guidelines. Wintrust Mortgage is a division of Barrington Bank and Trust, N.A., a Wintrust Community Bank NMLS #449042.

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