Predictions for housing market and home prices in 2021

Predictions for housing market and home prices in 2021
The covid-19 pandemic brought recession but the housing market is still shining, home prices are high due to low mortgage rates and high buyer demand. The upcoming trend for the future market is not certain at all but there are some glimpses of what might come up and they can give us a hint about what to expect. Looking at the prices, it is expected that they will go on increasing even in 2021, even though the rate of increase won’t be as high as 2020. The rate of increase in home prices will slow down as we progress further in 2021. By September 2021 the rise will be just 0.2%. The home-buying activity has slowed down slightly in recent times in spite of the persisting strong demand. The hopes for slowing down of home price growth are strengthened by the mortgage application data recently. A slowing down in the purchase of loan applications has been observed recently.

Other predictions for housing market in 2021 Next year we may encounter a foreclosure wave. The borrowers who have not settled up yet may have to bear the brunt of foreclosure in 2021 due to expiry of most of the foreclosure moratoria and running out of mortgage relief options. Each state will have a unique timing of foreclosure and this will play a decisive role in the period of onset of the predicted [foreclosure] wave.

When the foreclosure wave hits, there will be many options left for real estate investors. This will not only allow them to have more options to choose from, but a major affordability lift will be there too. The rise in housing starts was found to be 14% more in October 2021 when compared to last month. The prediction by experts say that the rise will get higher in the year 2021 even more – which means that the construction work will increase.

Mortgage rates are one of the decisive factors which play a crucial role in home pricing. It’s very unlikely that they will stay at record low figures, but this year they may remain low. It’s predicted that they will be within the range of high two percent to low three percent figures throughout 2021. We cannot make a concrete prediction about what the future has in store for us and with a sudden occurrence of Covid-19 pandemic it becomes even harder to foretell anything. By observing current conditions we can somehow say that 2021 will have somewhat similar factors driving the real estate market with a foreclosure wave and additional construction. This can slow the price rise and enlarge the inventory a bit more than 2020.