While the pandemic nearly halted the economy in 2020, 2021 sees some changes thanks to the recent Covid-19 vaccine rollout. Experts are now seeing the economy slowly picking up, and there's hope that there might be some good home sales as more households prepare to buy homes in 2021.
Both buyers and sellers interested in entering the market in 2021 should understand all the current and projected states of the market. Take a look at the following real estate trends for summer 2021.
More Demand in the Suburbs and Low-Taxed Areas
The pandemic has pushed people to the suburbs leading to more demand for homes in those areas. If you think about it, many people only live in the big cities because they're closer to their offices. But that's now changing since more and more people now work from home. They’re not forced to report to work to the offices every day; hence, more comfortable living in the suburbs.
There are also traits of the suburbs that continue to attract home buyers. These include larger homes at lower prices. They have more space to set up a home office and beautiful outdoor space to enjoy. Some are closer to trails, beaches, and open spaces where people can spend their free time.
Besides the suburbs, other people are leaving the high-tax areas in favor of places with lower taxes. This trend is highly noticeable among the rich like Elon Musk, who moved from California, a state with the highest income tax, to Texas, where there's no income tax. If Texas real estate trends and other states continue to go in this direction, the summer of 2021 will see more people move to states with lower taxes.
Mortgage Interest Rates Will Remain Low
Experts have noted that the Pandemic indeed brought down the 30-year fixed mortgage average. January 2021 saw the rate drop to 2.65%, down from 3.64% the previous year. The month of April recorded a slight increase to of 3.18%, but that number dropped back to 2.98%.
Even though the mortgage interest rates are still relatively low, there's still a slight increase from what was noted in 2020. There's an upward trend in the mortgage interest rates going into spring. While it's likely to maintain its historic low, the warmer months will still see a slight increase.
From the calculations, it's worth noting that the interest rates have recorded a slight increase in 2021. But this increase is nothing to worry about because the percentage is still relatively low and is expected to remain that way up to 2022. There couldn't be a better time to buy a house than now when the rates are still low.
An Increased Demand for Homes
But while the interest rates still remain low, there's still a large demand noted throughout 2020, and that has remained in 2021. There's the desire for more space and the creation of new households driving the home buying demand this year.
According to a report by realtor.com, 2021 March recorded a 52% lower number of homes than that of March 2020. As a result, there's increased competition between homebuyers. Buyers are more likely to lose in their offers before finally getting accepted.
While the competition is getting stiffer, this is unlikely to deter buyers. This is because many homebuyers in the U.S are millennials just clocking 30, and that's the ideal age for buying a home. The older generation is also not left behind as many are on the verge of buying second homes or upgrading to a bigger house.
It Will Be a Sellers' Market
Many areas have turned into seller's markets as there are not enough homes to match the ever-growing number of buyers. The demand is not reducing any time soon, and the summer of 2021 will remain a seller's market. Come to think about it; the vaccines will continue to be administered, which means they'll be hoping for a better economy. Many businesses are set to reopen, and the unemployment rates will fall steadily. Consumer confidence will grow, driving buyers into the market.
This is good news for home sellers because more buyers in the market means more sales and higher prices. The market will continue to favor the sellers creating a perfect opportunity to cash out or move real estate investment to the next level. For homeowners planning to sell their homes, this is the time to prepare, get to the market, and make money on your house.
Home Prices Will Continue Rising
The early months of 2021 recorded a nearly 20% rise in home prices. Homebuyers will feel pressured, and some may end up going out of their budgets to afford their dream homes. While this is a strain in the pocket for most buyers, it's going to put a big smile on sellers' faces. The home sellers smell a nice profit on the horizon.
Entering the market will be more difficult for buyers due to increased demand and the rise in prices. Buyers have to act fast to beat the growing competition, and this is becoming more than a jackpot to the sellers. But this trend could also push buyers to opt for temporary rental spaces as they wait for the prices to go down.
Increased Demand for Rentals
The pandemic was not that kind to the rental market in the U.S. The shutting down of retail stores, restaurants, and other workplaces had a huge impact on the rental market. The occurrences negatively impacted the renter's ability to afford rent, and evictions became a growing concern during the pandemic.
This gave rise to various supports across the U.S in the bid to reduce the amount of back owed rent. Congress approved more than 46% billion in rental assistance. This was part of the coronavirus relief package and the American Rescue Plan Act.
Another help came from the U.S Centers for Disease Control and Prevention, which extended its eviction moratorium. The program halts eviction of people facing financial problems due to the pandemic through June. This program gives time for the distribution of federal rental assistance by the state governments.
But with all the past hardships in the rental industry, the summer of 2021 will see some positive strides. With the rising cost of houses, many people will not be buying homes and will instead move to rental spaces. Landlords have started reporting that they receive about 50 to 100 emails within 24-hours of listing their single-family house for rent. This means that there will be a renewed interest in the urban centers of major cities in the warmer months.
The seller's market is becoming hotter daily, as seen in the forecasts and market patterns. The real estate trends of 2021 prove that there will still be a good time for home sellers. There's no better time to list your house than now. It's also important to note that these housing market trends will likely help lead the economy into its recovery.
If you're a seller looking to list your home this summer and grab a share of the high prices, SimpleShowing will be a good place to begin. Contact us and we'll help you sell your home while the price is still favorable.