A Real Estate Market Forecast for 2021
2020 delivered many unforeseen highs and lows. The unprecedented global pandemic and its effects on the housing market were impossible to predict.
One notable upswing of the housing market was hitting an all-time record high for U.S. median home prices.
With all of the twists and turns that the past year has taken, you might be wondering what is in store for the real estate market in 2021.
Here we'll unpack the 2021 real estate market forecast. We'll give you the information you need to make informed decisions for the year ahead.
Rising Home Prices
There is good news for sellers as home prices are projected to continue rising in 2021. While prices rose exponentially versus the prior year in 2020, a slower rate of increase is anticipated in 2021.
An influx of Gen Z and Millennial first-time homebuyers will be entering the market in 2021 along with homeowners looking to purchase larger homes as they have children. Combine this demand with low mortgage rates and limited inventory and you have a recipe for higher home prices.
Realtor.com's housing market predictions put 2021 home price increases at 5.6% over 2020.
Continued Growth in Home Sales
2020 broke away from the traditional pattern of home sales spiking during Spring and Summer. It is expected that home sales seasonality will normalize in 2021 and see a 7% increase over 2020 sales.
It is anticipated that mortgage interest rates will remain low but increase slightly as 2021 progresses. This could cause a bump in home sales as buyers rush to buy, taking advantage of lower rates before they increase.
Inventory Challenges
The lack of new and existing inventory in the housing market presented some challenges for buyers in 2020. The 2021 real estate market forecast projects improvement in shortages, but they will still exist.
The good news for buyers is that construction is projected to increase in 2021 by as much as 17% for new single-family residences.
Real Estate Trends to Watch For
The 2020 pandemic accelerated the already growing usage of online buying and selling real estate tools. From virtual tours, virtual agents, and tools to research homes and neighborhoods, the real estate market has proven it can thrive online.
Remote work has become the norm for many during the pandemic. This new normal could shape future trends for companies' policies on remote work. Watch for trends as homebuyers might increasingly be searching for homes with office space to support their new working arrangements.
The Gen Z generation along with later Millennials will most likely be entering the real estate market for the first time in 2021. This presents an entire population of new buyers hoping to take advantage of low mortgage rates.
Take Action From the Real Estate Market Forecast
Check out our website for tips on how to take action with the information in this real estate market forecast.
Whether you're a buyer, seller, or real estate agent, we have the latest updates on real estate market trends and events and what they mean for you.
Stay informed and ahead of the curve with the valuable real estate market resources on our site.
