3 Ways Closing on a House is Going to Change in 2021
COVID-19 had a massive impact on the housing industry, including processes such as open houses and closing on a house. If you closed on a house during the pandemic, you probably saw slower mortgage approval, record low mortgage rates, and record high house prices.
Luckily, with the new vaccine coming out, the country’s economy will slowly, but surely, go back to normal. That being said, there are still a few predictions for how the house closing process will change in 2021.
Here are those predictions.
1. Forget about Closing in the Spring
Traditionally, the spring season is known as the best time to sell, buy, and close on a house. However, this is expected to change in 2021.
Due to COVID-19 lockdowns and restrictions, the whole housing market and its timeline had to adjust. According to George Ratiu, the senior economist with Realtor.com, “What happened is we had a shifted seasonal pattern. Summer became spring, and then we saw the activity in terms of demand for housing continue well into this fall”.
There has been a surge in house sales in the last couple of months due to the spring market losses due to COVID-19. Proof of this is when house sales grew to an annual rate of 6.85 million in October, which was the highest number since 2006.
Lawrence Yun, the chief economist for NAR, stated he expects the home market growth to increase due to the new COVD-19 vaccine and mortgage rate projections to be around 3% in 2021.
However, this seasonal shift is expected to last throughout 2021.
2. Prepare for Record High Prices and Faster Closings
Experts believe that houses will close with record high prices in 2021. This will be a blow to those on a budget.
In addition to record high house prices, mortgage interest rates are expected to increase a bit, hovering around 3% instead of 2.5%-2.8%. This increase will make monthly housing payment more expensive.
With that being said, prepare for and expect to close on a house at a higher price than in the past.
The closing process is also expected to be a bit faster. At the end of 2020, 72% of houses went into contract in less than a month, compared to 36 days in the previous year. This is expected to continue in 2021.
3. Prepare for More Online Options
The house closing process is looking to move more online in 2021, as more providers and lenders have offered clients the ability to complete an application fully online, deliver disclosures electronically, allow online notarization, and enable an online escrow process.
This switch to an online platform has been more convenient to both the client and the providers, as the online process greatly reduces time and effort.
Get Through the Closing Process with New Venture Escrow
With the new year about to begin, it may be hard to keep track of all the changes that are about to happen for the house closing process.
Let us help make keeping track of these 2021 house closing process changes easier for you. We always keep a lookout and are prepared for any and all changes in this process.
Make the house closing process even easier with our innovative online escrow service, VentureTrac 4.0. VentureTrac 4.0 allows users to:
- Keep track of who has received and signed important documents
- Access documents associated with your escrow transaction
- Sign documents at anytime
- Look up everyone involved in their escrow process, with full contact information
If you require more information or if you’re ready to get started in your escrow process, contact us at New Venture Escrow!
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