As we all know, 2020 was a historic and challenging year because of the pandemic. And as its impact on the economy, unemployment and lockdown continues, these factors will have a major influence on the housing market and mortgage industry in 2021. As a result, mortgage lenders in Georgia have given their analysis and advice on what trends you can expect in the coming year and their effect on loan rates, refinancing, home buying and more.
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Mortgage Lenders in Georgia Expect Rates to Increase in 2021
According to mortgage Lenders in Georgia, mortgage rates hit a historic low of 2.65% at the beginning of January. This is due to the lasting influence the pandemic has had on the economy, as unemployment and lockdown caused a halt in regular activity and spending. However, as the vaccine rollout gains traction and lockdown subsides, this is expected to cause a stimulus in the economy, which could lead to inflation. Traditionally, inflation causes increased mortgage rates. However, depending on the actions of the Federal Reserve, this inflation could be minimal if they choose to purchase longer-term bonds as this will help to keep mortgage rates low.
How Much Will Mortgage Rates Rise in 2021?
While mortgage lenders in Georgia do anticipate a rise in mortgage rates over the upcoming year, this increase will likely be minimal and occur incrementally as the year continues. While different housing authorities are predicting varying percentages, the average rate for 2021 is likely to stay slightly above 3% for the year, however much of this is to be determined by the pandemic. Though, it is not expected to rise greater than 4% and is still projected to remain at a historical low for the year.
How Will This Affect Trends in the industry in 2021?
Based on these estimates, mortgage lenders in Georgia have provided the following analysis regarding how these rising rates will affect trends in the industry.
- The demand for housing will decrease, but the prices will continue to increase. With more people spending time inside because of the pandemic, the demand for housing skyrocketed in 2020. And while it will likely decrease as mortgage rates increase, businesses may continue to have their employees work from home, which means there will still be a high enough demand to inflate housing prices.
- Now is a great time to invest in your home equity. While mortgage rates have dropped during this time, home equity has dramatically risen. As a result, mortgage lenders in Georgia recommend cashing out on a refinance to pay off other debts or invest in home improvement projects.
- Get rid of private mortgage insurance. With the increase in home equity over the last year, it could be an ideal time to cancel private mortgage insurance, especially if you were a first time home buyer that needed it to purchase your property. Consult with a mortgage lender in Georgia to review your options.
- If you want to refinance, do it during the first half of the year. While the increase in mortgage rates will be slow, it is expected to pick up traction in the second half of the year. So, mortgage lenders in Georgia advise refinancing your mortgage sooner rather than later to take advantage of lower loan rates while they are still around.
When you Work With BrightPath, You Work With the Best Mortgage Lenders in Georgia
Much of the last year has been unpredictable because of the pandemic. And though we are steadily inching our way back to the life we once knew, there is still a level of uncertainty that we must continue to navigate. As a result, our mortgage lenders in Georgia will use their expertise and experience to guide you through the changing trends in the industry so you can make informed choices that will help you achieve your long-term goals.
Contact us today to schedule a consultation.
At BrightPath, we will be by your side every step of the way.