It is no secret that the real estate market has defied a pandemic-driven recession and high unemployment. With this said, could we be on pace for the best winter in history for real estate? According to Lawrence Yun, Chief Economist for the National Association of Realtors, this winter may be one of the best ever for sales activity. With this said, it is important to note that these predictions do not place winter home sales above spring or summer. However, on a relative winter-to-winter basis, this could very well shape up to be the strongest on record.
Mortgage applications are also up 20% year-over-year, which reflects the number of buyers in the pipeline approved for mortgages and ready to buy. Home prices are up too: The median existing-home price for all housing types was $311,800 in September – a 14.8% increase from a year ago.
2021 housing forecast and recap of 2020 forecast
- Mortgage rates: 3.1% (3% for 2020 forecast)
- New-home sales: +23% (+20% for 2020)
- Existing-home sales: +9% (+3% for 2020)
- Home prices: +3% (+6% for 2020)
- GDP growth: +4% (-5% for 2020)
- Job gains: +3 million (-7 million for 2020)
- 10-year treasury: 1% (0.9% for 2020)
- Consumer price inflation: 1.6% (1% for 2020)
Summary
A recent National Association of Realtors (NAR) survey showed that 47% of Realtors said their clients are interested in moving to the suburbs or a subdivision, and 39% are interested in relocating to a rural area. However, only 14% are interested in moving to an urban area or central city. Many home buyers also want larger homes, sometimes to accommodate multiple generations, according to NAR’s 2020 Profile of Home Buyers and Sellers.
The current work from home environment will continue to drive demand for larger homes. Of course, the biggest factor underscoring everything in the current economy will be the availability and distribution of COVID-19 vaccines. This will be critical for the real estate market as we move past the winter months and into the typical spring buying season.
