Experts Predict Housing Market Will Be Robust In 2021
The housing market was strong in 2020 thanks to record-low mortgage rates, and the outlook for 2021 is that it will be even more robust then this past year. “Even as the pandemic hopefully nears its end, Americans will continue to buy homes that fit their new lifestyle,” Daryl Fairweather, said chief economist of Redfin. “As a result, 2021 will see more home sales than any year since 2006.”
According to Danielle Hale, chief economist of realtor.com, home sales are expected to grow 7 % in 2021. Prices will rise another 5.7% on top of 2020’s already high levels. It is believed that mortgage rates will continue to remain low with a slow rise from 2.7% to around 3%. High buyer demand and still-lagging housing supply will keep prices growing, but at a slower pace than in 2020. On the whole, the market will remain seller-friendly, but buyers will still have relatively low mortgage rates and an eventually improving selection of homes for sale as the year goes on.
When it comes to new home construction, it is predicted that more new homes will be built in 2021 than in any year since 2006 according to Redfin's forecast. New construction has already picked up since the pandemic began, and building permits increased 21% from September to November compared to the same period last year. However, residential construction will continue to have to deal with higher costs and longer delivery times for building materials.
According to Redfin's predictions, with more people working remotly from home, a domino effect has lead to an increase in homeownership. It is believed by the end of 2021, the rate of American homeownership will reach 70% for the first time since 2005.
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