HOUSING MARKET FORECAST: WHAT’S AHEAD IN 2021?
While 2020 faced its fair share of ups and downs, we know one thing to be true: the real estate market not only met expert predictions, it surpassed them, breaking records along the way.
With that in mind, there’s one big blaring question right now: will the housing market in 2021 follow the same trajectory or are we facing a possible downturn?
Let’s take a deep dive into what leading real estate experts are projecting for 2021 so you have the knowledge and confidence you need to succeed this year.
Interest rates are projected to stay low
One of the biggest drivers for 2020’s booming real estate market was record-low mortgage rates.
Because of this, affordability reached one of the highest levels it has in the last 30 years. Naturally, eager buyers followed.
The good news is, experts are predicting that mortgage rates will remain low for the foreseeable future.
While home prices continue to appreciate across the country (more on that later), the counter of the low mortgage rates makes purchasing a home increasingly affordable, especially for first-time homebuyers.
This trend is expected to stick around in 2021, but a possible slight increase in mortgage rates and appreciating home values could lead to a slight decrease in affordability for 2021.
Home sales are projected to grow by 7%
If you thought you were busy in 2020, this year could be even busier.
That’s because experts are predicting a 7% increase in home sales compared to last year.
This signifies one big piece of news: we will likely see an increase in inventory for 2021. Whether it’s hesitant homeowners who waited out the pandemic or brand spanking new homes from builders, more inventory will be a welcome change from the last year.
Bottom Line
Despite everything that happened last year, the real estate market not only survived but thrived, playing a big part in our economic recovery along the way.
The next 12 months are just as promising, with interest rates expected to remain low, buyer traffic staying high and inventory levels predicted to rise.
As agents, the biggest lesson you can take away from 2020 is that you are the bridge between information and action.
That’s why it’s important to always be armed with the most current real estate insights and news. If the market does mimic expert projections this year as it did in 2020, you need to be prepared for another big year in real estate.