How Will The Housing Market Change In 2021?

| Jan 5, 2021 | Commercial Real Estate

The choice to buy or sell your home is one of the most substantial financial decisions a person will make in their lifetime. Whether you’re sizing up, buying a starter home, or changing locations, the market doesn’t always meet your immediate needs. The past year’s events have led to an unprecedented change in both the job markets and real estate markets. Though the next year could very well be as unusual as the past one, there are some trends that analysts and experts think could hold true for 2021. 

Finding the best home for your needs

The past year’s housing market was very active with some extremely low mortgage rates. This combined with the increased prevalence of remote work, has influenced many buyers to move into previously unconsidered locations. Sellers enjoyed high sales rates and a competitive market. Here are some of the ways the real estate market might change in 2021:

  • Sales are expected to rise 7 percent, with a 5.7 rise in prices.
  • Mortgage rates will probably increase, even as sales and price growth increases. 
  • The combination of consistently high buyer demand and a lower supply of homes has kept the real estate prices increasing.
  • The high prices of the last year have served as a significant barrier for many first-time home buyers.
  • Despite the demand for new construction in lower-density areas, the higher cost of materials has limited residential construction.
  • Homeowners hoping to refinance are doing so more frequently, given the current low-interest rates. 

Making the right financial decision

The first half of the year looks like it will continue in the trend of lower house inventories available with very low mortgage rates. Changes in the economy could appear in the second half of the year, keeping sellers in a good place as buyers need to remain cautious. If you’re looking to start the home buying process, familiarize yourself with the trends that could affect this decision.