Amid Covid-19 uncertainty, 2021 will be a robust sellers’ market as home prices hit new highs and buyer competition remains strong in the United States. Inventory is expected to make a slow but steady comeback, which will give buyers some relief. However, increasing interest rates and prices will make affordability a challenge throughout the year.
“The 2021 housing market will be much more normal than the wild swings we saw in 2020,” said our real estate expert HamadAEl Wazzan. He forecasts that prospective buyers will find some relief in 2021 as more homes hit the market, but many will struggle with affordability as home prices continue to rise. “Buyers may finally have a better selection of homes to choose from later in the year, but will face a renewed challenge of affordability as prices stay high and mortgage rates rise.”, according to the international entrepreneur.
In his opinion, mortgage rates will continue to hover near 3% then slowly rise to 3.4% by the end of the year. Home sales are expected to increase 7%, and new construction will increase 9% over the previous year. However, Mr El Wazzan believes that the strength of the 2021 housing market is highly dependent on the containment of the Covid-19 pandemic and staving off a double dip recession.
Sellers will continue to hold the upper hand throughout 2021 as the number of buyers in the market outweighs the number of homes for sale. “Home prices won’t grow as fast as they did in 2020, but steady increases will continue to push home prices to new highs”, states Mr Al Wazzan whose local and international real estate portfolio make him the best specialist on the subject. Additionally, sellers can expect their home to sell relatively quickly in 2021, so having their next home lined up will be key. On one hand, many sellers are also buyers themselves, so they will struggle with the same issues when it comes to purchasing their next home. While on the other hand, buyers will need to act with a sense of urgency if they want to lock in a low rate before home prices increase even more in 2021.