What to Expect From the Housing Market in 2021

Buying

At the start of 2020, many economists expected homebuying to remain healthy throughout the year, bolstered by fairly low mortgage rates – below 4% – though held back slightly over concerns of a future recession to occur in 2021 or later.

When the coronavirus first caused stock markets to drop dramatically and the spread of COVID-19 led to widespread school and business closings and calls for people to remain in their homes, mortgage rates initially dropped in lenders’ efforts to offset the scare.

Selling

As homebuyer activity has dropped significantly, many sellers have decided to delay putting their homes on the market, both to continue social distancing and eliminate the need to move in the middle of a pandemic.

However, not everyone has the luxury of waiting. Fortunately, all is not lost. Daniel de la Vega, the Miami-based president of ONE Sotheby’s International Realty, which has locations throughout Florida, says that while activity has decreased, agents are still showing homes – by video tour – and homes are still going under contract.

Right now, the challenge is to make sure homes that are on the market don’t linger. Real estate listing agents are highly focused on “making sure they price these home appropriately so they don’t sit on the market too long,”

The outlook for home sellers after the pandemic, like with buyers, depends on how long quarantines and the spread of the virus last. As more homes that would have been on the market at the start of spring remain unlisted, we can expect to see more go on the market shortly after the pandemic ends.

Renting

Renters are expected to be especially hard hit since they account for much of the workforce affected by closed businesses, reduced hours and layoffs.

Many first-time homebuyers who are holding off on a home purchase remain renters for now. This means rents are likely to rise in the near future due to continued demand. However, the financial uncertainty caused by COVID-19 is leading to both government and public pressure for landlords to give tenants suffering illness or job loss a break.

The U.S. Department of Housing and Urban Development has placed a moratorium on evictions for all rental properties insured by the Federal Housing Agency through mid-May. Governors and mayors throughout the U.S. are following suit and halting evictions as well, and some sheriff’s departments are announcing that they will stop carrying out lockouts for the time being.

https://realestate.usnews.com/real-estate/articles/what-to-expect-from-the-housing-market