Entering 2021, the housing market will remain strong as the economy recovers from the pandemic-driven recession. Mortgage rates will remain low, with the rates rising slowly to around 3% for a 30-year-fixed mortgage. The continuing low rates means there will likely be more new home buyers entering the market this year.
With the new Covid-19 vaccine hopefully lessening cases, it is expected that new listings will increase making for a more balanced market. Daryl Fairweather, Redfin’s Chief Economist, expects new listings to grow by over 5%. With the increase in new listings and slowly rising mortgage rates, this will cause price growth to moderate.
By the end of this year, it is expected that the rate of homeownership will reach 70% for the first time since 2005. People who lived in expensive cities to be close to work are now largely working from home, prompting them to buy their first homes in affordable areas. As landlords in those urban areas lose tenants, they will likely sell their properties. This surge in condo sales will give many who remain in the city the opportunity to become homeowners as well.
As the country recovers from the effects of the pandemic, it is expected that this will be the strongest year of home sales since 2005. If you are thinking about buying or selling this year, we can help! Contact us for a free consultation.