Is This Red Hot Housing Market Going to Cool Down?
Kel & Company May 11, 2021
Kel & Company May 11, 2021
This housing market has been baffling the U.S. for the last few years now, and everyone is wondering if the market is going to stay at these ridiculously high prices/low inventory levels, or is the market going to start adjusting?
People are wondering if home prices are going to start to go back down or even crash, if home inventory is going to start to go up, or if we are ever going to see a "normal" housing market again.
So what can we expect from the housing market for the rest of 2021? Is it going to start cooling down or adjusting, or are we in for more of this crazy roller coaster ride?
Here are three trends that are expected to be seen in the real estate market coming up this summer:
According to a survey from Realtor.com, about 10% of current homeowners plan to put their homes on the market this year, with more than half of them being affordably priced. And an additional 16% of the people surveyed expect to list their homes within the next two to three years.
Typically, only about 8% of homebuyers list their homes for sale each year. That means we should be seeing a 25% increase in the number of homes on the market, or roughly 1.5 million more homes coming to the market.
Even with a projected increase in the number of homes on the market, it still won't be enough to offset the demand for houses. From the great migration of people moving out of cities and into the suburbs due to the increase of remote work and younger Gen-Z and Millennial buyers entering the market, the demand for houses will continue to stay the same it looks like.
Prices will also continue to go up, but not at the same rate as they were going at in 2020, according to Forbes. "Single-family housing starts are expected to grow another 9 percent in 2021. On the whole, the market will remain seller-friendly, but buyers will still have relatively low mortgage rates and an eventually improving selection of homes for sale."
Yes, the projections show that mortgage interest rates are going to increase, but they should be increasing at a long-term, gradual rate rather than a fast spike.
Our economic recovery from COVID-19 depends heavily on the Coronavirus vaccines. “Mortgage rates should rise as we are in the early stages of getting our economy working again,” says Logan Mohtashami, housing data analyst at HousingWire.
The exact time that we see rates start to rise and how much they will increase will depend on a few factors. How we are able to deal with the economic impact of the Coronavirus will be the main factor to keep an eye on. There are other factors, though, like inflation and the Federal Reserve's desire to keep mortgage rates low will also affect things overall.
If you are looking to buy while rates are still low or if you want to refinance your home and take advantage of these low rates, contact me today and I can help you!
While no one can predict the market with perfect accuracy, seasonal patterns offer helpful insight.
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