As home prices surge, some areas are offering pockets of affordability with several homes under $100,000. In fact, in November, there were about 50,100 single-family listings priced at $100,000 or less across the country, according to realtor.com®—often low-priced properties located in smaller to mid-sized cities or in nearby suburbs and rural areas.

But buyers are struggling to snag one of these affordable homes as lenders pivot toward more financially rewarding transactions.

Realtor.com® explains that it’s typically not profitable for lenders to execute small-dollar mortgages or loans, defined as those that are $100,000 or less. Buying trends during the pandemic have made it even more difficult to receive a small-dollar mortgage. Lenders are focused on larger, more lucrative loans, which are surging due to low mortgage rates.

“It may be more difficult than ever for borrowers to get a [more modest] loan,” Nadia Evangelou, a senior economist and director of forecasting at the National Association of REALTORS®, told realtor.com®. “There’s such a high demand for high-dollar loans.”

Purchase loans are up 26.3% annually. The average purchase loan was $376,800 during the week ending Dec. 18. That is nearly four times more than a small-dollar loan. In 2019, only about 8.9% of all mortgages made for owner-occupied homes were less than $100,000.

Small-dollar loans can be more expensive for lenders to make. “The cost to originate [loans] keeps going up,” Steve O’Connor, senior vice president for affordable housing initiatives at the Mortgage Bankers Association, told realtor.com®. Lenders may even lose money on making smaller loans, particularly those below $50,000, because of the added fixed costs, including appraisals and processing and underwriting fees.

Some programs are being created to help make small-amount loans. For example, the MicroMortgage Marketplace—created by the Urban Institute and the Homeownership Council of America and lender Fahe—offers small-dollar loans through a pilot program that they hope to roll out nationally.

“There is a lot of affordable housing out there, but if you don’t have the financing and you can’t get the mortgage and you don’t have the cash on hand, [you can’t] get on the road to homeownership,” Sheryl Pardo, a spokesperson for the Urban Institute, told realtor.com®.

Meanwhile, investors are swooping in to purchase these low-cost properties in all-cash deals since they’re able to bypass financing. The homes then often become rental properties.

As the pandemic wears on, more homeowners are looking to spruce up their nests by searching for home design inspiration online.

Houzz, a home remodeling and design resource site, recently analyzed the most popular home design searches of the year to determine the most popular trends during the pandemic began. The two standout trends relate to the outdoors and creating cozy getaways at home.

Looking at searches from May to July, Houzz found that users’ interest in the outdoors doubled during that time. The design terms that saw the biggest growth:

• Above-ground pools: up 192%
• Outdoor chairs: 183%
• Outdoor pillows: 122%
• Hammocks: 122%
• Covered patios: 109%
• Fire pits: 96%
• Porch swings: 88%
• Outdoor umbrellas: 83%
• Gazebos: 47%
• Pergolas: 38%

Materials also proved to be popular searches in that stretch of time, with increases for batten and board siding (up 282%); corrugated metal roofs (up 222%); wicker (up 160%); and wrought iron railings (up 146%). The most trending colors included burgundy (167%), white (91%), and navy blue (55%).

Read more about the latest home design trend forecasts for 2021:

10 Design Trends Homeowners Are Eyeing for 2021

Top Kitchen Trends for the New Year

Mortgages are now taking an average of nearly two months to close as lenders face a surge in business spurred by low mortgage rates and high demand.

The average time it took a mortgage to close in November was 55 days, according to Ellie Mae’s Origination Insight Report.

The 55-day average wait is proving problematic for borrowers who might lock in their mortgage rate for a 30-day or 45-day period. The rate lock will hold a low mortgage rate for a specified time. But if it expires before a buyer closes, buyers could get stuck paying a higher interest rate on their mortgage or have to pay another fee to extend their rate lock, The Motley Fool reports.

“A big reason why mortgages have been delayed lately is volume,” The Motley Fool reports. “Low interest rates are fueling demand for new home purchases and refinances, and mortgage lenders are incredibly busy trying to keep up with everyone.”

Home buyers’ anxiety levels could increase as the frustrating wait to close lengthens, but buyers likely can do little if a mortgage is delayed by a lender processing their loan. However, they could possibly jumpstart the process by making sure they respond to all the information the lender requests promptly and at the time of the application, The Motley Fool reports. The sooner they submit all the requested information, the quicker lenders can get to work processing the mortgage.

The latest REALTORS® Confidence Index report from November shows that 30% of contracts last month were delayed but did eventually reach settlement. The most common delays were related to obtaining financing, which contributed to about 26% of those instances.

On Sunday night, President Donald Trump signed a $900 billion COVID relief package that authorizes rental assistance, stimulus checks to individuals for $600, loans for struggling small businesses, and more.

The president had delayed signing the bill for several days after Congress approved the relief package early last week. Trump had disagreed with extra unrelated COVID relief spending measures contained in the bill and had urged more money than $600 for individuals.

“I am signing the bill to restore unemployment benefits, stop evictions, provide rental assistance, add money for PPP, return our airline workers back to work, add substantially more money for vaccine distribution, and much more,” Trump said in a statement on Sunday evening.

The bill was also attached to a $1.4 trillion spending measure to keep the government running through September. Funding for the operation of the federal government would have run out at midnight on Monday without the approval of the measure.

The National Association of REALTORS® has applauded several items that will assist its members and help homeowners and landlords in the bill. NAR championed several provisions within the bill, including rental assistance. An updated FAQ for landlords and a quick reference guide are available.

“Through this bill, our members will continue to have access to unemployment and small business assistance,” Shannon McGahn, chief advocacy officer at NAR, said last week when Congress approved the bill. “But perhaps one of the biggest wins is rental assistance, which we have fought hard for since the last major COVID-19 bill was passed in April. It will bring instant relief to both mom-and-pop property owners and American families in danger of going over a financial cliff at the end of the year.”

The bill will bring $25 billion in rental assistance to states through Sept. 30, 2022, allowing landlords to apply for funds on behalf of tenants. It includes payments for rent and for other costs related to housing, such as utilities and similar expenses.

The new bill also extends the federal eviction ban through the end of January.

Also, the bill will provide an additional $284 billion for the Paycheck Protection Program and creates a more simplified forgiveness process for borrowers who take part in the loan program. One in five REALTORS® took out a PPP loan after Congress approved the program in the spring soon after the initial outbreak of the coronavirus in the U.S.

The relief package also provides up to $600 in direct stimulus checks to millions of Americans. Read more about the details of the bill at NAR.realtor.

Many first-time buyers are being priced out of the housing market as inventory shortages persist. Adding to the woes, home prices have risen annually by double-digit percentages.

While home sales have increased during the pandemic, the market share of first-time buyers has mostly stayed the same. First-time buyers made up 32% of sales in November, about equal to a year ago, according to the National Association of REALTORS®’ latest existing-home sales report. “Housing affordability, which had greatly benefited from falling mortgage rates, is now being challenged due to record-high home prices,” says NAR Chief Economist Lawrence Yun. “That could place a strain on some potential consumers, particularly first-time buyers.”

The median price for an existing home in November was $310,800, a 14.6% jump from a year ago, NAR reports. Prices rose in every region across the U.S. “We have clearly seen a bifurcated outcome in the housing market,” Yun told Newsweek. “People who can work from home or have exposure to the stock market have done well in 2020, but those on the front lines at restaurants, hotels, and grocery stores—who tend to be renters—have not.”

Low mortgage rates and the ability for more people to work from home have helped to lift home sales, he says. Existing-home sales were nearly 26% higher in November than a year ago. Mortgage rates are at the lowest averages since Freddie Mac began tracking such data in 1971. Last week, the 30-year fixed-rate mortgages averaged an all-time low of 2.67%.

As for first-time buyers, they may need to explore down payment assistance programs to help them afford homeownership. Besides federal loan programs that offer low or no down payment options, there are more than 2,500 down payment assistance programs nationwide, according to a 2019 report from the Joint Center for Housing Studies at Harvard University. Real estate pros can educate their clients about down payment assistance programs.

Some real estate pros are having their best year ever for home sales, despite the pandemic. Existing-home sales in November climbed 25.8% compared to last year, the National Association of REALTORS® reported Tuesday.

Existing-home sales—completed transactions on single-family homes, townhomes, condos, and co-ops—did dip down by 2.5% in November compared to October’s unseasonably high levels, however. The slight decrease last month ended a five-month streak of month-over-month gains. Still, all four major regions across the country posted significant year-over-year growth.

“Home sales in November took a marginal step back, but sales for all of 2020 are already on pace to surpass last year’s levels,” says Lawrence Yun, NAR’s chief economist. “Given the COVID-19 pandemic, it’s amazing that the housing sector is outperforming expectations.”

A buyer frenzy for a limited number of homes for sale continued to press on many housing markets in November. Home prices are rapidly rising in response to the high demand, posting double-digit increases compared to a year ago, NAR reports.

Despite the booming housing market, the pandemic continues to wreak havoc on the economy. Unemployment remains high, and rapidly rising coronavirus cases mixed with stricter lockdowns are weakening consumer confidence.

“Circumstances are far from being back to the pre-pandemic normal,” Yun says. “However, the latest stimulus package and with the vaccine distribution underway, and a very strong demand for homeownership still prevalent, robust growth is forthcoming for 2021.”

6 Key Housing Indicators

Here’s a closer look at findings from NAR’s latest housing report:

Home prices: Median existing-home prices in November were $310,800—a 14.6% jump compared to a year ago. Prices rose in every region across the U.S.

Inventories: Housing shortages abound with inventories falling to record lows. Total housing inventory declined annually in November to 1.28 million, reflecting 2.3 months at the current sales pace.

Days on the market: Homes are selling faster. Seventy-three percent of homes sold in November were on the market for less than a month. Properties typically remained on the market for 21 days, down from 38 days a year ago. “The positive momentum that home sellers are seeing will carry on well into the new year,” Yun says. He cited record-low mortgage rates (the 30-year fixed-rate mortgage averaged 2.77% in November) and the growth in remote-work flexibilities as helping to propel that momentum well into the new year.

First-time buyers: First-time buyers continue to face affordability challenges as home prices rise. First-time buyers made up 32% of sales in November, about equal to a year ago, NAR’s data shows. “Housing affordability, which had greatly benefited from falling mortgage rates, are now being challenged due to record-high home prices,” Yun says. “That could place a strain on some potential consumers, particularly first-time buyers.”

Investors and second-home buyers: Individual investors and second-home buyers purchased 14% of homes in November, a small decline from 16% a year ago. Investors and second-home buyers tend to account for the largest share of cash sales. All-cash sales comprised 20% of transactions in November, unchanged from a year ago.

Distressed sales: Foreclosures and short sales are hard to find in the current market. They made up less than 1% of sales in November, down from 2% a year ago.

Regional Breakdown

Here’s how existing-home sales fared across the country in November.

Northeast: Existing-home sales dropped 2.2% to an annual rate of 880,000—a 25.7% increase compared to a year ago. Median price: $354,100, up 17.4% annually.

Midwest: Existing-home sales fell 2.5% to an annual rate of 1.59 million in November. However, that is up 24.2% from a year ago. Median price:$239,100, a 14.6% increase from November 2019.

South: Existing-home sales decreased 3.8% to an annual rate of 2.82 million in November, up 25.9% from the same time last year. Median price: $270,000, a 15% increase from a year ago.

West: Existing-home sales held steady last month recording an annual rate of 1.4 million in November, a 27.3% increase from a year ago. Median price: $467,600, up 13.8% from November 2019

The hospitality industry has been hard hit in the pandemic, as shutdowns and the lack of travel have prompted a surge in vacancies. But investors are swooping in to buy hotels and reimagine them as more than just short stays.

Instead, hotel conversions are becoming a bigger business as investors look to buy hotels and turn them into rental apartments. Investors are buying struggling or foreclosed properties at bargain prices and “looking to profit from rising demand for cheap housing from households forced to downsize during the recession,” The Wall Street Journal reports.

Nearly 20% of hotels with securitized mortgages are delinquent on their loans, as of November, according to data from Trepp LLC. That is up from 1.52% a year ago.

“We consider ourselves a building recycling company,” Dan Norville, president of Vivo Living, told The Wall Street Journal. Since the pandemic, Vivo Living has been working on three hotel conversion projects in Mesa, Ariz.; South Bend, Ind.; and Winston-Salem, N.C. It plans to buy a fourth hotel in San Antonio, Texas, early next year.

Extended-stay hotels are ideal for turning into apartments, Elan Gordon, principal of SHIR Capital, a real estate investment company, told The Wall Street Journal. The firm has converted hotels into apartments throughout South Carolina and Texas. Extended-stay hotel units already have kitchenettes built into them, he notes.

But these types of conversions can take time, as they sometimes require zoning changes. Also, hotel rooms are usually not large enough to be qualified as a housing unit under most current zoning laws and must be adapted.

An increasing number of homeowners’ mortgages are in forbearance as more owners take advantage of COVID-19 relief assistance from lenders before the end of the year.

About 37,000 more mortgages were added to forbearance during the week ending Dec. 15, bringing the total to 2.787 million loans. That represents about 5.3% of the nation’s 53 million total mortgages, according to data from Black Knight.

The number of FHA and VA loans in forbearance rose by 18,000 to 1.139 million, a 9.4% share, Black Knight says. For comparison, only 3.2% of Fannie Mae- and Freddie Mac-backed loans are in forbearance.

Borrowers with loans insured by the Federal Housing Administration originally were told they needed to contact their lender to request forbearance before Dec. 31, which may help explain the uptick in requests this month. But the FHA announced Monday that it was extending that deadline to Feb. 28, 2021.

Borrowers can request an initial 180-day period of forbearance and then a 180-day extension. Borrowers don’t have to make any mortgage payments during their forbearance period. They can make up those missed payments over time by working out a plan with their lender once their forbearance period has ended.

More than 550,000 forbearance plans are set to expire at the end of December, according to Black Knight data.

As for homeowners exiting forbearance, many are having their home loans modified by changing the terms of their mortgage and are able to bypass refinancing, The Motely Fool reports.

Meanwhile, foreclosure activity remains low as moratoriums remain in place. The Federal Housing Finance Authority and Department of Housing and Urban Development announced Monday that they have extended moratoriums on evictions and foreclosures for holders of single-family mortgages through Feb. 28, 2021. The moratoriums were originally set to expire on Dec. 31. Fannie Mae and Freddie Mac have made similar extensions, which prevents homeowners from being foreclosed on during the specified period.

“Extensions ensure borrowers can continue to seek assistance and avoid eviction and foreclosure while maintaining temporary policy flexibilities for lenders and servicers,” the FHA said in a statement.

The Consumer Financial Protection Bureau offers a dedicated webpage for homeowners who are struggling, with mortgage and housing assistance options during the pandemic.