The year 2020 has been a unique time for homebuyers. It was a year marked by low mortgage rates, increased buyer demand, and limited inventory. In-person open houses were replaced with virtual tours. Individuals who had been saving to purchase a home had to think twice about it as the economy took an unforeseen downturn.
Mortgage rates are expected to stay competitive in 2021. Likely, buyers are going to be interested in purchasing a new home. There are several trends that can be expected to emerge throughout 2021. Here are three examples.
1. An Increase in Housing Inventory
The year 2020 had a limited selection of homes available. Some people felt uncomfortable moving out of their homes because of the pandemic. Others were worried about job uncertainty and opted to hold on to the homes that they had as opposed to selling their homes and trying to buy other ones.
When the job market is limited, home prices skyrocket. Limited inventory means that buyers were forced to settle for homes that they really didn’t want. However, 2021 seems to offer the hope of increased inventory as vaccinations rollout to the public.
It is expected that by mid-spring, vaccinations will be readily available. Sellers will feel likely comfortable having open houses and putting their homes on the market. If vaccines lead to a post-coronavirus economic recovery, sellers might feel comfortable enough to list their homes and to contemplate moving.
2. Housing in Major Cities Will Become Cheaper
The housing market in major cities has always been expensive. Most people live in the city because it allows them to be closer to work, restaurants, and centers of entertainment.
However, 2020 has been the year of remote work. More businesses are allowing their employees to work from home, so this means that employees no longer need to live in major cities in order to pursue their careers. Now, people are looking for places to live that are less expensive, that offer more square footage, and that provide a different quality of life than what is seen in the city.
If the current exodus from cities continues, it is likely that major cities like New York will no longer be millionaire and billionaire playgrounds. City abandonment could lead to lower home prices in 2021. Buyers thinking about living in a place like New York or San Francisco might find great deals in 2021.
3. Interest Rates Should Remain Low in 2021
Home prices are on the rise. However, it is expected that in 2021, high prices will be mitigated by low interest rates. Financial officials have been forced to keep interest rates low to mitigate the negative impact the pandemic has had on the economy.
The pandemic initially brought the housing market to a standstill. However, as the economy continues to reopen, home buyer demand is increasing. According to Fannie Mae, the forecast for 2021 is that interest rates could fall to a low 2.9%. If that is true, demand for real estate will only increase.
According to predictions, 2021 will be a buyers’ market. Now is the time to evaluate where you would want to purchase real estate, to analyze the market is the area, to talk to professionals, and to prepare an aggressive strategy to help you take advantage of the real estate market in 2021.