The historic low interest rates have spurred an increase in new home mortgage applications. According to the June 2020 Builder Application Survey from Mortgage Application Investors, the mortgage applications for new home purchases in the United States increased 54.1 percent compared from a year ago. This was even a 20 percent increase over May 2020, not including an adjustment for any typical seasonal patterns. This data shows that the global pandemic affected home buying by delaying the usual “spring market” until the summer months. What does this spike in new home mortgage applications mean for investors?
Save When Purchasing Your Investment
For both home buyers and investors, lower interest rates make purchasing a home more affordable. The savings you receive by purchasing with a lower interest rate equal greater profits on your investment. Whether flipping the home to sell or using it as a rental, you will pocket more because of the low-interest rate you received. The opportunity to save when purchasing your investment makes it ideal for those who have been considering real estate investing for the first time.
Investors will Profit More
The increase in new home mortgage applications means more people are ready to buy. Investors who find homes that need to be renovated can enjoy greater profits. Many home buyers are searching for move-in ready homes or cannot afford to make necessary repairs or updates that lower-priced homes may require. By offering a newly renovated home, buyers will understand that value and pay a premium for your investment property. Also, with a low inventory of homes for sale, home sellers are profiting more nowadays because the increased demand from home buyers is driving prices higher. Now is an excellent time to receive top-dollar for your investments.
Greater Competition for Desirable Properties
The increased demand from home buyers means that investors will face greater competition on highly desirable properties. MBA’s Associate Vice President of Economic and Industry Forecasting said, “MBA estimates that new home sales in June increased 15 percent to a seasonally adjusted pace of 774,000 units – which would be the strongest level of activity since January 2020.” This verifies an increased amount of competition when buying a home. The low inventory of homes available and increased demand has resulted in multiple offers being made on properties within only a day or two of being listed. Therefore, it is essential to work with an expert real estate team like Reedy and Company to help you secure your investment properties.
Don’t Rule Out Profits from New Construction
With an increased demand for homes but only a low supply of homes available, new construction will help equal out the market. Investors who partner with builders can profit by finding affordable lots for new homes, which will fill a void of inventory in the housing market. The data shows that people are ready to buy, so now is a great time to invest in new construction.
Invest in Memphis, TN Now
Memphis, Tennessee is an excellent choice to begin or expand your investment property portfolio. The city offers a booming industry and continued expansion that attracts many professionals. With affordable properties still available, now is the time to invest in Memphis and capitalize on the growing market. Partner with Reedy & Company to guide you to the best real estate investments in Memphis, TN. We are the leading real estate investment company in the area, offering a full-service package to our investors. Our professionals will handle everything for you, from identifying the best properties that have the potential for maximum profit gains to screening and securing tenants to ensure a steady flow of income. Contact us with your investing or property management questions today.