The main culprit for the housing recession: monetary policy. If you're wondering what the state of the housing market will be like over the next six months, especially if you're an investor, then here is some good news for you. The health & economic crisis poses a real upward hill for housing participants going into the winter season. As discussed above, home sales are constrained by low inventory and diminished seller and buyer confidence as the effects of COVID linger in the labor market. What will 2021 be like for investors? The typical home spent 53 days on the market this October, which is 13 days fewer than last year and one day less than last month. https://www.realtor.com/research/2020-national-housing-forecast/, Housing construction, demand, and supply Michigan is 78% during this period. The most recovered markets for home prices include Austin, Pittsburgh, Riverside-San Bernardino, Houston, and New Orleans, with a home price growth index between 111 and 116. We saw some of the best home sales and housing starts to pace in more than a decade until February 2020. The think tank says the housing market “defied gravity” in August, with … The post The Housing Market Could Fall Very, Very Sharply by 2021! Although growth in supply remains below the normal seasonal pace it continues to improve as buyers anxiously await more sellers to put fresh new homes for sale on the market. The rate is encouraging when compared to previous months but is still above the highest rate during the Great Recession—10 percent in October 2009. Ratios above 100 indicate that the typical household has more income than necessary to purchase the typical house. Your email address will not be published. Check this page each quarter for updates to the Michigan Real Estate Market Forecast. The volume of new listings has also been trending lower over the past couple of weeks, as sellers across the country are reluctant to list amid the rising cases of coronavirus. Los Angeles (+16.9%), Philadelphia (+16.7%), and Cincinnati (16.3%) posted the highest year-over-year median list price growth in October. On the other hand, the homeownership rate of 67.4 percent was 2.6 percentage points higher than the rate in the third quarter 2019 (64.8 percent) and not statistically different from the rate in the second quarter 2020 (67.9 percent). As of November 7, the latest weekly housing market trends show that median listing prices continue to grow at 12.9 percent over last year, marking 13 consecutive weeks of double-digit growth in asking prices. Although the demand has softened a bit as compared to previous weeks but is nowhere to close to a level where you can imagine the balance real estate market conditions. While pending contracts are at an all-time high, that will not necessarily translate to a record number of home sales because not all contracts lead to closings and due to sampling size variations. According to Freddie Mac, mortgage rates continue to slowly drift downward. But more recently, job openings appear to have stalled, and other statistics indicated that the labor market remains in the grips of recession. These improvements in the labor market reflected the continued resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic. The most recovered markets for home-buying interest include Buffalo; Baltimore; Sacramento; Washington, DC; and San Antonio, with a housing demand growth index between 122 and 127. Amid Covid-19 uncertainty, 2021 will be a robust sellers market as home prices hit new highs and buyer competition remains strong, according to the realtor.com 2021 housing forecast … To put it simply, the US housing market is ripe for investment in 2020, making it a great time to buy a rental property for sale to increase your cash flow. The median sales price of new houses sold in September 2020 was $326,800. With high interest from buyers and a limited flow of new listings, the total active listings have been lagging behind from the previous year. “The housing market continues to be a bright spot for the economy, supported by increased buyer interest in the suburbs, exurbs and small towns,” said NAHB Chief Economist Robert Dietz. County Housing Market Outlook Publications. Approximately 89.9 percent of the housing units in the United States in the third quarter of 2020 were occupied and 10.1 percent were vacant. Inventory was predicted to remain constrained, especially at the entry-level price segment. The 1-bedroom median and 2-bedroom median were down 15.0% and 17.1% from last year, respectively. Years of slow home-building activity coupled with the ongoing financial crisis point to the fact that the number of homes for sale would still fall well short of demand in the coming months. Mortgage rates for housing are anticipated to stay at near 3% over the next 18 months which will keep things easier for buyers. Buyers have been looking for signs of a slowdown in the housing market that has been red hot since its post-pandemic recovery but the prices continue to skyrocket. Meaning, general housing market predictions are that housing prices will fall through the end of 2020 before recovering in Q3 of 2021. With inventory falling to record lows, mortgage lending standards tightening, new and existing home sales are precited to fall back over the remainder of 2020. The price of the typical home for sale remains unchanged at $350,000. 2021 housing market forecast: It’s about politics, not economics Financial protections set to expire during split congress November 23, 2020, 4:54 pm By Ralph McLaughlin In other words, homes are selling faster. The personal saving rate — Personal saving as a percentage of disposable personal income — was 15.8 percent in the third quarter, compared with 25.7 percent in the second quarter. https://www.realtor.com/research/2020-housing-market-predictions-covid-19-update/ As affluent New Yorkers are buying houses in suburbs, the real estate market in those areas has prospered. Despite that, there is little sign so far that the housing market is about to subside. Pending home sales experienced a minor decline in September after four consecutive months of contract activity growth, according to the National Association of Realtors®. In hot job markets and communities that fit the youngest generation’s ideals, price increases of 8-15 percent are possible year-over-year. Due to this persistent shortage of housing, some experts predict that the median home price for the country as a whole could easily rise by 10% cumulatively over the next two years. Before the coronavirus pandemic began, the U.S. housing market was already short from the supply side. To help borrowers and renters who are at risk of losing their home due to the coronavirus national emergency, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the Enterprises) are extending their moratorium on foreclosures and evictions until at least until December 31, 2020—originally moratorium was supposed to expire at the end of August. They have an abundant supply of renters in the high-income bracket with more disposable income who are willing to compete for the best apartments and rentals. In this case, you face a seller’s market as soon as people are allowed to go out shopping. COVID-19 continues to limit economic activity, yielding higher apartment vacancies, and lower overall rent growth. What do you think? However, industry experts are seeing more positive conditions in many suburban markets. Zillow's market pulse report dated October 28, 2020, also shows regaining of buyer confidence with a modest weekly improvement in mortgage applications. The previous forecast predicted a 3.8% increase in home prices over this time frame. The sales growth amounted to an annual rate of 6.54 million – up 9.4% from the prior month and nearly 21% from one year ago. It’s similar to any other index where you have a starting point or a starting year and you peg it at a hundred and it just goes up and down from there. Still, the overall amount remains high. This was equal to roughly 200,000 homes being taken off the market. The rental vacancy rates in the Midwest and South were higher than the rate in the West, and there was not a significant difference between the rates in the Midwest and South. https://www.daveramsey.com/blog/real-estate-trends More than 6 million households failed to make their rent or mortgage payments in September, according to the Mortgage Bankers Association's Research Institute for Housing America. The coming weeks should paint a clearer picture of whether demand is softening or will remain strong through the winters. Fannie Mae is assuming that the spike in unemployment will drag on the housing market for the entire year. “Lumber prices are now up more than 170 percent since mid-April, adding more than $16,000 to the price of a typical new single-family home,” NAHB Chief Economist Robert Dietz said in a statement. SANTA CLARA, Calif., Dec. 2, 2020 /PRNewswire/ -- Amid COVID-19 uncertainty, 2021 will be a robust sellers market as home prices hit new highs and buyer competition remains strong, according... | December 2, 2020 Current-dollar personal income decreased $540.6 billion in the third quarter, in contrast to an increase of $1.45 trillion in the second quarter. This is an acceleration from the 11.1% yearly growth seen in September as the October median listing price sustained summer highs. Housing Market Forecast 2021 //Here are my FIVE housing market predictions for 2021. Oakland 1 and 2-bedroom medians decreased by 19.2% and 12.3%, respectively. The national median sales price of existing single-family homes was up 4.2 percent in Q2 2020 to $291,300 and up 5.9 percent to $280,200 based on the Trailing Twelve Month (TTM) average of quarterly median prices according to the National of Association of Realtors® (NAR). The overall recovery index is showing the greatest recovery in San Jose, Los Angeles, Las Vegas, Rochester, and Boston. Real disposable personal income decreased by 16.3 percent, in contrast to an increase of 46.6 percent. The official unemployment rate jumping ten percentage points or more means many people are out of work. The experts predicted that monetary policy will be the deciding factor this time around. This is why it is predicting a 15 percent drop in home sales for 2020 over 2019 numbers. It forecasts the UK housing market and economy to make some gains and stabilise by the end of 2021. The added competition for these homes due to the moratorium on foreclosures could drive up the prices in the distressed housing market. A reading over 50 indicates that more builders view sales conditions as good compared with those who view them as poor. 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