The housing market is highly reliant on the state of the economy, which means that real estate trends can change quite quickly during times of crisis. When you live in the midst of a global pandemic, it may be difficult to understand where the real estate market will go next.
Are you curious about how the housing market will do this year? Here are some predictions we have for real estate trends in 2021 and beyond!
Mortgage Rates Stay Low
As a response to the economic crisis caused by the COVID-19 pandemic, mortgage rates have been at historic lows in the past year. This is likely to remain stable during 2021 as well.
However, mortgage rates may start rising when the pandemic and economic situation of the country begins to improve. This may be as a result of effective vaccines, eased restrictions, and government support for businesses to stay afloat during this season.
House Prices Are Going Up
The supply of houses is not that high at the moment, meaning that the housing market may be facing excess demand. This can be because existing homeowners are choosing to stay put instead of relocating.
Demand for houses is also increasing as people are trying to find suitable locations to continue remote work. Another reason is that customers are trying to make use of the low mortgage rates as a window to own a house at a more affordable price.
As this happens, real estate prices are skyrocketing – even increasing by double digits at one point – and this trend is expected to stay for a while.
Real Estate Renting Concerns
The rental market has not been doing well during the pandemic, and this affects both tenants and landlords. Due to rising unemployment and the economic downturn resulting from the public health emergency and imposed lockdowns, plenty of tenants are finding it difficult to pay for rent.
This means that real estate investors and landlords will also have difficulty making an income from their property.
There is some hope in the form of government support. This comes from bills that support rental assistance, extensions in eviction moratorium, and more.
There Is Going to Be More Construction to Meet Demand
The increase in building permits provides hope that the increased supply can begin to address the current housing shortage. Millions of building permits have been approved at the start of the year. This situation may, in the long term, stabilize real estate price hikes and enhance affordability.
Important Trends in Real Estate in 2021
When it comes to the housing market, an individual needs to follow current economic trends in order to understand what’s happening in real estate. In 2021, mortgage rates are likely to remain low (or slightly increase from having vaccines). At the same time, increased housing demand is likely to keep prices increasing for properties.
The rental market is likely to face continued difficulties in affordability. At the same time, newer construction may be able to reduce the pressure on housing supply and stabilize prices in the long term.
Contact us today for assistance in your home search.