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Is it a Good Time for Millennial Homebuyers?

If you're a millennial who is just starting a career, you might be wondering whether or not it's a good time to buy a home. The answer to this question varies depending on your individual situation. However, it is currently a very strong buyer's market. Here's what you need to know about purchasing a home in 2021 as a millennial.

1. Interest Rates Are Unusually Low

Interest rates are much lower than usual, which is because of the effect that the pandemic has had on the economy. In fact, it's easy to find home loans that offer interest rates of 2.5% or less nowadays. This is especially true for buyers with a high credit score. 

As a result, signing on to a mortgage today could be a much better choice for your long-term financial future than waiting to buy your first home. However, there are other factors that you need to look at when you're wondering if it's the right time to buy a home. 

Are Today's Low Interest Rates Going to Rise?

Interest rates are going to rise rapidly as the economy recovers. As a result, locking on to low rates now could definitely be a wise financial decision for millennials. In fact, locking on to a low-interest mortgage could save some home buyers hundreds of thousands of dollars in the long run. 

2. Buying a Home Can Give You More Space

Due to the pandemic, many people have begun working from home. A large number of workers will still be working at home as the pandemic subsides. Owning a home can give you significantly more space, which can make it easier to work remotely. This can increase your productivity and improve the quality of your work. 

3. Prices Are Fairly Reasonable (Usually)

In most cases, home prices are fairly low nowadays. However, this is not always the case. Bidding wars can drive up the prices of a house, which can make your dream home unaffordable very quickly. However, you can mitigate the effects of bidding wars as a buyer by setting a hard limit on any home that you are considering. 

A financial adviser can help you to set a reasonable limit. In order to reduce the chances of a bidding war, it's best to choose homes that aren't a likely pick for cash buyers. That's because a cash buyer can easily outbid others. 

Are Home Prices Expected to Increase in the Near Future?

Housing prices will rise quickly. In fact, the high levels of demand in today's real estate market combined with rapid economic recovery are almost certainly going to lead to a sharp increase in housing prices. Therefore, you're likely to pay much less for a new home now than you'd pay in the near future.