Despite the pandemic shutdown and an economy reeling from business closures, the housing market for 2021 is looking strong. All indicators show that housing is a key component of current and future economic recovery. While some of the potential drivers will ebb and flow, spring housing trends should produce the significant bump financial markets need. Here’s a look at some important reasons this year is likely to continue with robust housing sales.
In recent months, the most popular financial tool for homebuyers, the 30-year fixed-rate mortgage, is at an all-time low. In fact, the rate has hit its 17th lowest rate in history, which occurred within a year. Rates are as low as 2.65%, the lowest Freddie Mac has recorded to date.
Most experts believe interest rates will edge up as home sales increase. However, sales are expected to stay strong through 2021. Additionally, after a brief low in demand after the pandemic began, house purchases began to soar with fewer homes available. With prices higher, home values are up, prompting more homeowners to consider selling well into the future.
While recovery for the overall market is slowly gaining momentum, the housing market is thriving for a number of reasons:
- Virtual work and schooling: Current homeowners and first-time buyers are seeking more space as work and school are now virtual for many people, and this situation may continue for some time.
- Single-family home popularity: Individuals who have lived in multi-family housing are attracted to the idea of owning single-family homes because many see them as safer in mitigating virus control. Health concerns will remain a potential driver of home sales in the years to come.
- Pandemic buying delays: People are acting upon pent up buying impulses as the market recovers. As more homes hit the market and warmer weather approaches, home sales should see typical seasonal purchases increase.
- Virtual buying: Homebuyers are taking advantage of new technologies that allow them to take virtual tours and purchase homes online. This is a revolutionary change for home sales and makes the buying process much more efficient and safer for consumers.
Despite the fact that housing prices rose significantly in 2020, there are still great deals to be made. With mortgage rates low, people feel it’s a good time to make an investment in real estate. First-time buyers are ready to take the leap and purchase homes that they were reluctant about in previous years.
Experts believe consumer sentiment is changing since the pandemic as people place new value on homeownership. Safety and security are two important factors, along with the desire to have roots and spend time with family.
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