Prospective homebuyers in Maine face one of the most competitive markets in decades. But a lending expert says there are steps you can take to increase your chances of coming out ahead.
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If you’re hoping to buy a home this summer, you’re in good company. Homebuyers in Maine face the most competitive U.S. 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’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 Maine are eager to own. The region has seen a significant increase in first-time homebuyers over recent months and more young buyers are looking to buy in the suburbs: In April, home sales were up 36% from 2020.
However, supply is not keeping up with demand. With Maine’s population modestly increasing by 2.6%, demand will continue to outpace supply as we head into the prime homebuying months, and low interest rates and stable incomes stay in place.
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 connections, a sense of community and good neighbors are just some of the key priorities for today’s homebuyer. Younger generations are looking for a multifunctional space as the home has become an office (45%), a school (31%), a movie theater (28%) and a gym (27%).
As properties continue to sell quickly in Maine, here are five tips to help you put your best foot forward.
1. 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 with support from state or local housing agencies. Organizations often provide workshops or guidance and tips to prepare your finances, make an offer, apply for a mortgage and more.
2. 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 pre approval online or via a mobile banking app, so you can begin the home search with a competitive edge.
3. Take advantage of digital tools
Timing can be everything in the current environment. There are several 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. Some even provide a to-do list of outstanding tasks, current status and details of a loan application.
4. 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.
5. 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 — for many, that’s a condominium or townhome. While it may not have all the amenities of your 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, it 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 home buying journey.
Genie Smith is the Maine-area lending manager for Bank of America. She can be reached at genie.smith@bofa.com.
