The real estate market has been the key indicator of the US economy. That’s why economists pay close attention to this market to know about and predict future growth. With 2020 being a super-challenging year for all of us, everybody is wondering how it will impact 2021, especially the real estate market. The housing market predictions 2021 will have a profound impact on their buying decisions. We have launched an extensive research on the real estate trends from various sources and here’s what we have found out.
Real estate trends 2021
Millennial home buyers make up the majority of the pool
Millennials, with a total number of 72.1 million, have been the largest group of home buyers in recent years and they are predicted to be the largest group this year as well. According to a Forbes report, the average household income of this group is $88,200. Considering that the average group of homebuyers from this generation is now of age earning a higher salary, many economists believe that millennials offer salvation for a slowing home market in 2021.
Mortgage rates are very low
The average mortgage interest rate has been super low lately. The average rate for a 15-year fixed-rate mortgage dropped to 2.31% in last year’s November. This rate has been an all time low since Freddie Mac started reporting 30 years ago. The National Association of Realtors predicts that 30-year fixed mortgage rates will waver between 3% and 3.25% this year and the next. Experts believe that these rates will continue to remain low until the economy recovers. And since the recovery period is still unknown, you have a greater chance of seeing low rates through this year.
Home prices are increasing
The current median home price is one of the highest in history. Existing home prices increased by 15% in November 2020 compared year-on-year. This has shot up the national median price to $320,000. Though the median price is high, the growth rate is one of the slowest with around 3%. However, the Chief Economist of the National Association of Realtors, Lawrence Yun, confidently forecast that this growth will rise again to 4% by the end of last year. All these data imply that you need to be more strategic while buying a house for yourself.
One of the major reasons why house prices are increasing is because there are not enough houses to be sold as compared to the demand. The housing inventory decreased nearly 22% and it’s predicted to stay the same for at least some more. This indicates that home prices will continue to increase.
Online real estate services on the rise
Since millennials are making up the majority of the home buyers and they are more tech-savvy, real estate services online are gaining popularity. Today, buyers are more inclined to search for a house on websites like Zillow, Realtor, and Trulia rather than visiting the estates physically. The online dependency has called for more real estate websites with ease of use and greater functionality.
Home staging and virtual tour
Since a huge chunk of the real estate business has gone online, aesthetics has become ever more important. Therefore, home staging has become a key factor to get a higher price when you are selling a house. On top of that, buyers want to have a visual experience of how the house looks. So virtual tours and videos are playing an integral role in today’s real estate industry.
Housing market predictions 2021
If you are hoping to buy or sell a home, you might want to have a look at the following housing market predictions 2021 to know where the market stands and what are your chances.
Housing market experts are forecasting a post-pandemic rebound for the market. As the mortgage rates are still low, jobs are recovering, and the rental price is high, people will be more interested in buying a house. And with a low inventory of houses in comparison with the pent-up demand, sellers might be looking at a big boom in their business.
More and more buyers are entering the market
When asked, real estate agents across the country reported that there is an increasing number of buyers entering into the market every month. This influx is super high in 22 states which could be a great opportunity for sellers.
Shortage of supply to meet the demand
As we have stated earlier, the difference between the available number of houses and the total number of buyers is 22%. This means that buyers have to work hard to find their preferred house in a neighborhood. One other thing is that homes are being sold at a faster rate than before. So buyers have less time at hand to decide whether or not to buy a house he just visited.
Does housing market predictions signal a crash?
Not likely. Current predictions by experts at the National Association of Realtors are showing that house prices are expected to grow at 8% this year and 5.5% the next year. These figures, combined with the gap between the demand and the supply, indicate that this market will continue to see growth for at least until 2022.
How to turn these predictions into your own profit?
All these figures, real estate trends, and housing market predictions are saying that it is the ideal time for anyone to enter into the market. And since the buyer preference has shifted towards online, having a property listing website is a scalable source of business these days. Fortunately, you can have your own real estate website with very little effort with real estate PHP scripts like ThemeqxEstate. It builds you a fully functional property listing website within minutes.
Housing market predictions are giving a healthy signal to both the buyers and sellers in the real estate industry. The US economy will be supported by it to gain more traction to recover from the pandemic effects. Be an early entrepreneur to make your country great again!