2021 U.S. Housing Market Predictions

In this topsy-turvy year, one sector has consistently remained a bright spot: the real estate market. Experts say it has largely brushed off the current pandemic’s effects, which has devastated many other industries.

As the year draws to a close, however, many wonder if the market’s strength will continue into 2021. To find out, take a look at the factors that will shape the Winthrop real estate landscape in the year ahead:

Home Prices to Rise

Observers expected housing prices to plummet following the pandemic, but such fears have failed to materialize. A new study commissioned by Zillow and Pulsenomics predicts that home prices will increase by 2.7% in 2021—far from the doom-and-gloom scenario many expected. Furthermore, the study expects housing prices to increase by 3.7% this year as well. Zillow economist Treh Manhertz says that the ongoing housing supply shortage, together with buyers looking to take advantage of low mortgage rates, are the reasons behind their optimistic forecast.

Strong Housing Demand

According to Realtor.com’s Housing Recovery Index, the real estate market hasn’t just recovered to pre-pandemic levels, it has already exceeded it. The report found that the sector is up by 10% overall compared to January 2020, right before the COVID-19 outbreak. A key driver in this rapid recovery is huge buyer demand, which is up 26% compared to the aforementioned baseline. This strong momentum is expected to carry into 2021, as buyers look for bigger abodes that are more conducive to working and studying from home.

Suburban Shift

The more people who live in a place, the higher the risk of catching COVID-19. For instance, large metropolises like New York City were especially hard-hit during the early days of the pandemic. It’s hardly surprising, then, that a survey by Harris Polls found that a third of Americans have considered moving outside the city. And now that more companies are allowing their staff to work anywhere, there’s no need to rent an expensive flat in the city when you can own a house in the suburbs for the same (if not lower) amount.

Mortgage Rates Remain Low

With the mortgage rate dropping to yet another record low, many are wondering if it will finally rebound in 2021. The good news for buyers is that many experts expect mortgage rates to remain low until a COVID-19 vaccine is approved. Currently, federal authorities estimate that no vaccine will be publicly available at least until April—and even then, the rollout will be staggered. Observers believe that if economic activity and consumer confidence pick up in the second half of 2021, mortgage rates may follow suit. But if no vaccine materializes by then, mortgage rates could drop as low as 1%.

If there’s one thing that these predictions confirm, it’s that Winthrop homes for sale are a sound investment indeed. More than just a house, it’s a stable asset that can withstand any economic headwind.

If you’re looking for trusted Winthrop realtors, contact the area’s leading brokerage: Coldwell Banker Winthrop. Give us a call at 509.996.2121 or send an email to info(at)cbwinthrop(dotted)com to get started.