2021 Housing Trends and Forecasts
2020 has been a tumultuous year, to say the least. Anybody and everybody’s economic predictions went out the window as the coronavirus pandemic spread around the world, and we sank into a global recession. But with a vaccine on the horizon and a new year about to begin, it’s time to look ahead to 2021’s housing trends and forecasts.
Before we begin, though, it’s important to acknowledge that we are in new territory. Predictions are just that: nobody knows what’s going to happen in the future, and it’s especially hard to forecast housing trends and forecasts in a unique pandemic-stricken economy.
What Happened in the Housing Market in 2020?
One of the big winners of the economic rebound this year has been the housing market. Home sales and prices both hit decade-plus highs (following decade lows over just a few months). This was largely driven by two things: a shortage of available housing inventory and extremely low interest rates. 2020 was a hot seller’s real estate market. And that’s largely expected to continue into 2021… Let’s dig into some of the specifics.
Housing Trends and Forecasts for 2021
2021 is expected to be a seller’s market. With buyers moving fast to beat out competition and lock in low interest rates, sellers are set to benefit – and buyers will probably battle affordability. Home prices are expected to reach new highs, rising by 5.7%. Home sales will also likely rise – forecasts are for a 7% increase. And, along with rising prices, buyers will contend with rising interest rates: mortgage rates are expected to rise by 3.4% by the end of 2021.
That’s a big leap, especially over the lifetime of a home loan, which is why you should consider getting in contact with a wholesale mortgage lender like UW Funding. Wholesale mortgages are generally much cheaper than retail – and in a market that looks tough to be a buyer, we might be able to find you a low rate that will make all the difference.
What You Should Know About the Housing Market in 2021
Seasonality is expected to make a comeback. Seasons more or less fell by the wayside in 2020, but 2021 should see a reversal of that trend. Remote work will continue to be a factor in the housing market, with 37% of home shoppers working remotely thanks to the pandemic. In fact, the ability to work remotely was a major factor prompting home-buying in 2020.
Inventory will continue to be a limiting factor in 2021, but that will ease in the second half of the year as construction ramps up new builds. (In 2020, due to the pandemic, there was an estimated shortfall of nearly four million newly constructed homes.)
From new builds to existing properties, UW Funding has multiple different home loan programs to suit you. We tailor our offerings around our clients – so whether you’re a first-home buyer or you’re looking to refinance your existing mortgage, we have a program to fit your needs. Reach out today for a no-obligation chat to find out more.