Home designs continually evolve each year to meet the changing preferences of homebuyers. Within big cities, apartments and condos have been the most attractive options because of their relatively low cost and flexible nature. However, with the Coronavirus pandemic (COVID-19) reaching unthinkable record number of cases in the United States, home designs have undergone yet another change.
What homes do people want?
As the most populated and busy areas, big cities have been the center for businesses and opportunities. As long as you were in close proximity to where you worked and were somewhat comfortable, people were complacent with their living arrangements. With the high prices of living in a big city, it seemed like condos and apartments were the only viable option for the average American. But the Coronavirus pandemic has lasted longer than anyone could expect and it could last for several months longer. More and more people are accepting that the pandemic could permanently change the way we live.
Recently, people have become increasingly invested in permanent residences because with quarantines and lockdowns, people are spending more time at home. Temporary living arrangements in shared buildings are no longer as attractive especially considering their close proximity to other people. Recently, condo listings have been surging causing their price to stagnate and sales to decline while detached home values have increased.
More than ever, people are looking to invest in purchasing their own houses. Even within big cities, people are looking to own this safe and predictable asset. After all, investing in a house during the pandemic means your money grows while your savings account loses its value to inflation.
Why detached homes over condos and apartments?
Traditionally, people sought out cheap living arrangements within big cities to have easy access to their jobs. However, working from home has become the dominant option for most employees during the pandemic and most companies are looking to expand these changes into normal business operations. This gives people a wider variety of choices when selecting their living arrangements.
Among this selection, detached houses provide the most benefits during these circumstances. While detached houses are more expensive, homeowners are more comfortable settling into a permanent residence. If you can afford a detached house, the increased space and privacy more than makes up for the higher cost while everyone stays at home.
Is buying a house smart?
Amidst the pandemic, home prices have generated the most consistent gains for homeowners. Investing in a home is one of the safest investments you can make and practically guarantees returns as its value increases over time. While steep mortgage costs have always been a roadblock to financing your home, extremely low-interest rates have made mortgages cheaper than ever. While mortgages are relatively cheap, they are still a large investment and you should consider many factors when purchasing a home. Even among detached houses, sizes, neighborhoods, and various other factors contribute to its price. It is important to make sure that you find the right mortgage before pulling the trigger.
How can I buy a detached house?
For a typical detached house, you should be able to finance your investment using a regular mortgage. Within most states, you can receive a maximum mortgage loan of up to $550k. At an average home price of about $300k, you have several options when considering what kind of home you want.
If you are looking for a more luxurious house, you may need more than a regular mortgage if your desired home exceeds the mortgage limits set by the FHFA. Instead, you can finance your home using a jumbo loan. These allow you to get loans from banks that exceed their regular mortgage limits. Jumbo loans are stricter than conventional mortgages, so you should make sure your financials are settled. When deciding to purchase a permanent home, it is important that you understand what kind of mortgage is best for you and the options that are available.
What will happen when the pandemic ends?
As the economy returns to normal and people start interacting once again, the real estate market is expected to surge. After being held back by regulations and risk, home prices will continue to grow and offer the returns that they promise. Mortgages will sharply increase in value as stimulus-related interest rates rise and return to normal. However, homeowners with detached houses will be able to reap the benefits of their investment. At current mortgage rates, purchasing a home during the pandemic is the right move if you have the capital.
For people who are offered the opportunity to work from home, being able to live in a permanent detached house makes their at-home work environment that much better. Owning a house is always the safest investment you can make because of its stable returns, but as home prices start to rise again, homeowners can expect even stronger returns.