As we get closer to the holiday season, many people start thinking about their real estate plans for the coming year. So far, the market has shown little sign of slowing down. Will this trend continue into 2021? It would appear so.
On Tuesday, the National Association of Realtor’s Chief Economist Charles Yun gave his 2021 outlook report. In it, he predicted a strong housing market continuing into 2021 due to the same factors that made 2020 so great: higher home sales, higher home prices, stable and low mortgage interest rates, and low listing inventory.
“My economic forecast is that in 2020, it is a recession, but in 2021 with the vaccine discovery availability, it will be positive. The interest rate environment will continue to be low, inflation not really a problem. Mortgage rates should remain stable near 3 percent all the way through 2021,” he said.
After a 6% increase in sales year over year in 2020 as compared to 2021, Yun predicted that we would see an even better 9% increase in sales in 2021 over this year. He further indicated that we would especially see an increase in the purchase of new construction homes (a predicted 23% increase over new home sales this year).
Yun believes that the strength of the market this year and next has much to do with the increased importance that Americans have placed on their homes during the pandemic and associated lockdowns. People are looking to improve where they spend a vast majority of their time, and include things such as home offices, home gyms, and entertaining spaces. There has also been a shift away from big cities toward suburbs and rural areas, as one’s location to work becomes less important.