For over a year, the ongoing pandemic has put the real estate industry on hold. However, the housing market has bounced back without slowing down homebuyers’ activity. We say this because the first few months of this year have seen a growth in property prices. The high buyer demand has created fierce competition in medium-to-small metro and suburban areas across the US.
Despite uncertain and hard economic times, the booming housing market has compelled investors and buyers to wonder: where is the real estate market headed this summer?
If you have the same question in mind, we have you covered here. In this article, we explain what you should look forward to in the real estate industry this summer.
Where is the Real Estate Market Headed this Summer?
This summer the real estate market will experience some drastic changes with increased demand from buyers. However, continued renter affordability and low inventory problems might persist through the warm season.
The fast rollout of the coronavirus vaccine has made many people hope that the effects of the pandemic are diminishing. But there are some housing market trends that will continue to rise in the coming years.
Here is a glimpse of a few trends that are all set to shape the housing market this summer.
- The interest rate can rise but will remain comparatively low
- Home inventory is expected to increase but will stay high in a seller’s market.
- Homebuyers will focus on the suburbs, but city living is expected to see a revival.
- Rental assistance may ease eviction worries for tenants, but it will not diminish the long-lasting impact of pandemic
Buying in the Real Estate Industry
With the forbearance ending, the COVID-19 pandemic has driven mortgage interest rates to historic lows for 2020. This might sound bizarre to you, but the current year began with a record low for the new interest rate for thirty-year. In early January, Freddie Mac reported a 2.65 percent average interest rate for home buying.
Moving forward, the mortgage interest rate trended upward yet remained low from an economic and historical standpoint. This average interest rate for fixed-rate mortgages increased in April and reached 3.13 percent.
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That is to say, the desire for a better space, low interest rate, and continuation of the new households in the USA increased demand for home buying in 2020.
The same demand seems to drive through the start of the current year. Most areas are a seller’s market, which means there are not enough properties available for the active buyers. The number of properties available in the market last month was 52 percent compared to last year, as per the realtor.com report.
Selling in the Real Estate Industry
One of the primary reasons for the low supply of properties on the housing market in 2020 was remote working. Homeowners who already had space for virtual schooling and remote working didn’t want to relocate.
Many homeowners were hopeful that the pandemic would end soon. That is why some sellers were more inclined to re-enter the market. In addition to this, the vaccinations increased consumers’ confidence, making home selling relatively less risky.
In fact, many sellers are looking for flat fee brokers to list their homes as experts expect inventory to increase in June and July as housing marketers head into summer. It is important to note that these figures represent housing prediction on a national scale. The effects on the different housing markets may vary widely.
You can learn the new trends on real estate through resources such as books and listening to real estate podcasts. Consulting an experienced and professional real estate agent will help you explore more about property pricing and activities in your area.
Renting in the Real Estate Industry
As mentioned above, the financial impact of the pandemic has not been kind on the rental market. In fact, the renter households are deeply affected by the shutting of restaurants, retail stores, and workplaces requiring personal work that people didn’t consider essential.
That makes tenant’s ability to afford rent a growing concern. The center of diseases and control extended its renting and eviction moratorium to halt evictions for people encountering financial difficulties. It offered more time to the State government to distribute the Federal Rental Assistance.
Although there is economic recovery, distributed rental assistance, and decreased cases of COVID, it is still unclear if there will be a reduction in mass eviction this summer.
Will Real Estate Go Up or Down in 2021?
Although the final data for 2021 is yet to be released, the real estate agents and housing market experts expect new property sales to get 20 percent higher and current property sales to get 3 percent higher compared to 2020. The housing market is likely to soar by 3 percent this summer.
Is It A Good Time To Buy A House Right Now?
Yes, now is a good time to buy a house and invest in a property. With the mortgage rate relatively lower, you can benefit from your property purchase. Plus, your interest rates play an important role in the total cost of a loan. Put simply, you can snag a mortgage to benefit from low interest rates to make it a good move.
It is especially true if you live in Arizona. According to Consumer Housing Sentiment Index 2021, the majority of investors believe that this is the right time to purchase a home. It is because many buyers are optimistic about the economic recovery in the State. They believe that the housing market has become the hottest market as the median price has appreciated by 182 percent.
More and more people are stepping into the property investment business by listing their houses on Zillow or MLS. They seek assistance from professional realtors to sell the property at the desired price.
In a nutshell, 2021 seems to come out from the pandemic effects when it comes to investing in the real estate market. The low interest rates allow many people to buy homes at fairly affordable prices. Thus, make sure you discuss your case with a professional to get in-depth knowledge of your local housing market.