While 2020 has been an incredibly challenging year, housing turned out as a bright spot. Despite the impact of the coronavirus pandemic, homeownership rates rose to 67.4% in the third quarter, up from 64.8% the same period in 2019.
The fundamentals are in place for a continued strong housing market in 2021, particularly with expectations that mortgage rates will remain around 3%. Here are a few more of our predictions for the year ahead.
Home prices will rise. The law of supply and demand will drive prices higher, with 5% to 6% increases predicted on average.
Affordability will remain mostly positive. Low mortgage rates will offset rising prices, increasing the number of households who can afford to buy a home.
Inventory challenges will continue. While builders are expected to construct homes at a faster pace in 2021, there’s still a gap between demand and supply for new and existing homes.
Increased teleworking will influence housing. People will continue to work from home, affecting where they’re shopping for homes and what they’re looking for in those properties.
Vacation home markets will stay hot. In 2020, homeowners with rising equity and investors with high stock market profits drove a spike in demand for homes in coastal markets, which will continue next year.
Technology remains critical. Virtual tours, remote closings and video conferencing kept real estate moving in 2020, and virtual buying and selling will continue to lead the way in 2021.
Whether you’re looking to buy, sell or invest in real estate in 2021, we can help. With our partners in mortgage, title, insurance and moving, our Long & Foster family has you covered for all your real estate needs. Happy Holidays!
Weekly Update: July 13, 2020
We’re halfway through the year and many are curious to know how the real estate market is measuring up to past years – especially with this year’s added challenges from the COVID-19 pandemic. While we expect some bumps in the road in the coming months, as of today, the market looks good.
Mortgage rates continue to decline. Last week mortgage rates dropped to an average of 3.03% for the 30-year-fixed rate. This new low has helped spur both home sales and refinances.
Consumer sentiment is moving in the right direction. Consumer sentiment is one of the most important metrics in determining the health of the real estate market. For June, consumer sentiment came in at 78.1, up from May’s low of 72.3.
Inventory remains low and people are still looking to buy. Active inventory was down 10% in the first week of July compared to the same week in 2019, while new listing volume was up by 22%. Showing activity of homes on the market was up 27.6%.
Median sale prices rose while homes sold faster. In most areas, median sale prices of homes were up slightly in June. The average number of days homes spent on the market fell by about 2 days.
The stock market is up. Rising numbers in the stock market can likely be attributed to good employment numbers from June as well as hopes for a vaccine for COVID-19. Last month brought another 4.8 million jobs, which was higher than predicted, and unemployment fell to 11.1%.
The bottom line is if you’re planning to sell, I recommend putting your house on the market before fall. There are many buyers out there who are ready and waiting for more inventory to come on the market, and presidential election years typically come with a slowdown in home sales in the weeks surrounding the election. Similarly, if you’re looking to buy, let me know. We can start your virtual house hunt today.
Let me know if you have additional questions. I’m happy to assist you with your real estate needs.
Selling or Buying from Home
While the COVID-19 pandemic is causing many things in work and life to change rapidly, my commitment—and my company’s commitment—to our clients and your safety remains unchanged. That’s why we’ve put processes in place for buyers and sellers to work with our team and conduct business virtually, from contract to close.
If you’re in the market to buy a home, we can meet virtually to discuss what you’re looking for and tour properties digitally. When you find your new home, we can write an offer with our secure online tools and get closing and moving scheduled with Long & Foster’s partners—all while following CDC guidelines and recommendations from state and local governments.
The same applies if you’re selling a home. I can virtually list your property, open doors to potential buyers with online tours, use our secure remote system for contracts, and safely close with our settlement partners.
Using Long & Foster’s integrated network of services makes the difference to our real estate success, now more than ever. Working as a team, we’ll help keep you, our valued clients, safe while continuing to meet your real estate needs with the same unsurpassed customer service.
Feel free to contact me if you have any questions about the current real estate market or our virtual home buying and selling procedures. As ever, I’m here for you and only a phone call or email away.
