There have been significant advancements in the housing market in 2020. Mortgage rates have been particularly low and more people have been able to relocate due to more remote working options. There is a demand for homes because more people are in the market to buy and many homes have been highly-priced to ensure a profit. Here are some of the predictions for the housing market in 2021, according to real estate experts.
According to Realtor.com’s chief economist Danielle Hale, home sales will increase by 7% in 2021, and home prices will go up another 5.7%. Mortgage rates, on the other hand, will increase gradually, and there will still be a high demand for homes since the economy will be in recovery mode. Even though home prices will be higher due to limited supply, they won’t rise as quickly as they did in 2020, since buyers will have to deal with price hikes and mortgage rate spikes, which can make some houses more challenging to afford.
Robert Dietz, the chief economist and senior vice president of the National Association of Home Builders asserts that more single-family homes will be constructed in 2021, but not as quickly as they were in 2019. This is largely due to the fact that some home sales have been finalized before the builders begin the construction process. More people will likely purchase homes in low-density markets and experience noticeably low-interest rates.
Chief product officer for Better.com Elana Knoller says that the housing industry and homeowners will use technology more in the coming year to attract buyers and close home purchasing deals. More people had to take virtual tours of homes in 2020 and participate in eClosings to move into their new homes, and this trend is expected to continue in the new year.
Homeowners are expected to refinance sooner than they did in previous years to make sure they lock in a low-interest rate. The Fed has made it clear that they don’t plan on raising interest rates in the near future. However, it is unclear what the new presidential administration will do, since the COVID-19 vaccine is becoming more readily available and there is hope that the economy will improve. These factors mean that interest rates could go up sooner than expected. Regardless of the change in mortgage and interest rates, real estate experts say that Millennials are likely to continue buying homes in record numbers.
2021 could be one of the best years to purchase a home, depending on a buyer’s price range and desired home location. It is also becoming more common to purchase a home pre-construction, which allows homeowners to customize their residence and make it more marketable when it’s time to sell.