If you’re hoping to buy a home this summer, you’re in good company. Homebuyers in Rhode Island and around the country are facing the most competitive housing market in decades: low mortgage rates and strong demand can mean heated bidding wars. The past year has fueled a stronger desire for homeownership, and Bank of America Corp.’s latest Homebuyer Insights Report found prospective buyers are eager to swap unpredictable monthly rents with steady monthly mortgage payments. In fact, nearly half (46%) of respondents say that building equity is more important now than ever before.
We know hopeful buyers in Rhode Island are eager to own. The local housing market is soaring, despite the pandemic and a lack of inventory. First-quarter statistics for 2021 from the Rhode Island Association of Realtors reveal that the median sales price of a single-family home rose to $330,000, a 13.8% yearly increase.
Beyond the financial benefits of homeownership, people are also reassessing how their living space and surroundings fit into their lives as we spend more time at home. Human connection, a sense of community and good neighbors are just some of the key priorities for today’s homebuyer.
As buyers scramble to find their dream home, competition will likely pick up as we head deeper into the traditional selling season. Here are some tips to put your best foot forward:
Get started as early as possible. You’ll want to be well-informed about the homebuying process so you can act quickly and with confidence once you’re ready to buy. Brush up on your knowledge using resources such as Bank of America’s First-Time Homebuyer Online Edu-Series, which provides an easy-to-understand roadmap to buying a home and allows you to go at your own pace as experts provide guidance and tips to prepare your finances, make an offer and apply for a mortgage.
The past year has fueled a stronger desire for homeownership.
Get your financing in place. In a competitive market, having a preapproval shows that you’re serious about becoming a homeowner, as you’re taking the necessary steps to get your finances and creditworthiness verified by a lender. Interactive digital tools allow you to secure preapproval online or by smartphone.
Take advantage of digital tools. Timing can be everything in the current environment. There are online resources that can guide you through the mortgage process from start to finish and prevent any delays in the process, whether it’s checking the status of your loan or submitting required documentation electronically. They’ll even provide you with a to-do list of outstanding tasks and current status and details of a loan application.
Know exactly what you’re looking for. Check out homes in your desired location beforehand, so you can narrow down the price range and home type that’s right for you.
Consider a starter home. If you’re eager to take advantage of low rates and feel confident in your financial position, you may consider a starter home – often a condominium or townhome. While it may not have all the amenities of a dream home or the perfect location, a starter home that you can comfortably remain in for a few years is typically less expensive. More importantly, a starter home can give you the chance to start building equity and establish fixed monthly mortgage payments, protecting you from rising rental rates.
Even as the meaning of home has evolved over the past year, homeownership continues to mean the power to build personal wealth and a legacy for your family. While buying a home today may require a bit more patience and persistence, taking the time to prepare for what’s ahead will put you on the way to beating the competition and crossing the finish line of your homebuying journey.
Beverly Walter is the Providence area lending manager for Bank of America Corp.
