Everything You Need to Know About the Housing Market in 2021
After a tumultuous year thanks to COVID-19, many people are looking to make a big move. An uncertain real estate market might make you leery of such a step. However, arming yourself with knowledge can make the process less scary.
Are you interested in learning more about the real estate market for the upcoming year?
We put together a guide with real estate predictions for the housing market in 2021 to help you make the best decision for your family.
Keep reading to find out everything you need to know.
How the Pandemic Shaped Moving Patterns
Surprisingly, many people pulled the trigger and moved in 2020. A Pew Research study found that 22% of adults moved within the US at the height of COVID-19.
In some cases, moving was a necessity due to a job loss or reduced income. Others moved because of new employment opportunities.
Predictions for the Housing Market in 2021
Experts predict the real estate market in 2021 will see continued growth. Many companies (and individuals) realized that working from home actually worked well for them. This new remote environment gives families more freedom to live wherever they choose.
Further studies suggest 20% more consumers plan to move in 2021 versus previous years. Some want to reduce their cost of living while others desire to be closer to family.
Reduced Housing Inventory
All those people moving could put a strain on housing inventory. In fact, the number of available houses on the market was already down 22% in November.
Stats according to realtor.com:
National inventory declined by nearly 50% last year
Newly listed inventory declined nearly 25% nationally and 23.5% for large metros areas last year
Now that more families are pulling up roots, you can expect available inventory to shrink considerably.
Home Prices on the Rise
Why does reduced inventory matter for the housing market? In a word…price.
Low inventory usually equals rising prices due to higher demand. We already saw this trend in late 2020, with home prices going up by as much as 15% in November. The median home price grew to over $300,000, translating to 100 straight months of price gains.
Sellers in Command
The reality of demand vs. inventory leaves home sellers firmly in control. Homes are generally on the market for a shorter amount of time, and sellers can demand the highest price.
If you are selling your home, make sure you choose an experienced real estate agent who knows your local market. You can also afford to wait for the best offer, rather than simply take the first one.
Historically Low Mortgage Rates
Sellers may be happy about these circumstances, but there is a ray of hope for home buyers. Mortgage rates are still at historic lows.
Average mortgage rates include:
30-year fixed = 3.99%
15-year fixed = 3.52%
5/1 ARM = 3.76%
A lower interest rate can make a home more affordable. However, you still need to make sure you can afford to make that investment.
The Future Is Bright for Real Estate in 2021
If you thought the pandemic would kill the housing market in 2021, think again. More people are on the move than ever. This can pose challenges, but also comes with rewards for buyers and sellers.
Whether you're a buyer, seller, or real estate agent, we have the latest updates on real estate market trends and news. If you have a question or you want to submit an article, contact us today.
