2021 Housing Market Predictions
Many people who are in the game of house hunting may find themselves frustrated at the way the housing market has heated up over the past year. 2020 was not the best year for us, no, but will things start to look up in 2021? Will the housing market stay afloat? Will the prices start to become more reasonable? Will interest rates start tip-toeing their way up again? These are all questions that are roaming in many American’s heads, and we are here to help mellow that anxiety you may be feeling about purchasing the home you have dreamed about.
Many experts are predicting another strong housing market in the year of 2021. The forecast reads that there will be an increasing demand for homes throughout the next few months to year based on how many Americans held off buying a home during the Pandemic. Statistically, the Millennial generation is carrying our housing market at a whopping 38% due to being first-time home buyers. This makes up the majority of the buyer’s market.
Despite the Pandemic, home sales set many records last year. In 2020, new home sales jumped up 20+%, and existing-home sales were 3+% higher than 2019. This is incredible for the housing market! Along with this, there is a prediction presented by NAR Chief economist, Lawrence Yun; he predicts that the housing market will increase by 3% this year. With this knowledge, Yun also predicts that interest rates will creep up and stay around 3.1% in 2021.
The Biden Presidency could possibly bring some change to the market. Biden proposed the “Home Buyer Tax Credit” as a candidate which would help Americans cover their down payment costs. Especially with the housing market being dominated by the Millennial generation, this will help build confidence amongst young homebuyers. Yun goes on, “the Federal Reserve is likely to pursue an expansionary monetary policy for a longer period” which will ultimately keep the interest rates to remain stagnant throughout the course of 2021. So, it is not likely that the interest rates will go over 3.5% in the year of 2021.
Although there are some doubts about the housing market, 2021 will bring a “more than normal” market. Experts including Realtor.com, Zillow, Redfin, etc.. all are in agreeance. The housing market in 2021 will be more normal. Although the demand for housing is predicted to still remain higher than normal, there will be a steady increase in inventory over the course of the next few months. Zillow predicts that 2021 will bring a 22% annual growth in home sales for a total of 6.9MIL homes sold, being the biggest annual sales growth since 1983!
No matter if you plan to stay or go, be sure to keep looking! There are some amazing predictions for the Spring of 2021, and you definitely do not want to miss out of these opportunities! Buyer/Seller’s confidence will continue to rise, but when will you be ready to make the jump for that dream home of yours?