Prediction #1 for the Real Estate Market in the U.S. for 2021 from Corelogic's Chief Economist
Who is Corelogic and why are these predictions important to consider?
I’ve been selling Real Estate in 92127 and 92128 for the last 16 years. I eat, sleep, and breathe real estate, and I trust Corelogic because they’re a leading provider to the government and other business analytics for financial and property data. So, in my opinion their predictions are worth their weight in gold because they’re based on data and facts.
Prediction #1: We will continue to have low interest rates throughout 2021. Currently fixed rate 30 year mortgages are averaging about 2.7% percent nationwide, which is a record low right now! They believe the Federal Reserve will continue to promote low interest rates throughout 2021. Their forecast on average, for interest rates this year as a whole, will be 2.9%, this will be the first year ever that 30 year fixed rate mortgages have averaged less than 3%. They also predict these low rate interest levels will go into 2022.
Home price appreciation in 2021 will continue to be determined by this imbalance of supply and demand. If supply remains low and demand is high, prices will continue to increase.
According to the National Association of Realtors (NAR), the current number of single-family homes for sale is 1,080,000. At the same time last year, that number stood at 1,450,000. We are entering 2021 with approximately 370,000 fewer homes for sale than there were one year ago.
However, there is some speculation that the inventory crush will ease somewhat as we move through the new year for two reasons:
1. As the health crisis eases, more homeowners will be comfortable putting their houses on the market.
2. Some households impacted financially by the pandemic will be forced to sell.
Low mortgage rates have driven buyer demand over the last twelve months. According to Freddie Mac, rates stood at 3.72% at the beginning of 2020. Today, we’re starting 2021 with rates one full percentage point lower than that. Low rates create a great opportunity for homebuyers, which is one reason why demand is expected to remain high throughout the new year.
Be sure to check out our YouTube Channel for all 4 of the Real Estate Predictions for 2021, and reach out to us anytime at ShellyONeil.com, we’re always here to help! Our team is Client Focused, and Driven by Results!