This year’s robust housing market flourished predominately due to low mortgage rates and buyers moving into less dense areas. According to Bankrate, those factors are poised to change in 2021. Mortgage rates will begin to inch back up, foreclosure rates will increase, plus VA loans will have more of an influence on the market, says Bankrate. Housing economists say that once the pandemic is a thing of the past and the economy begins to recover, mortgage rates will make their return to 3.1%. Home prices are expected to rise through 2021 at a much slower pace, but still see 3 to 4.1% gains.
“I just hope home price increases moderate so that affordability conditions do not get out of hand,” says Lawrence Yun, chief economist at the National Association of Realtors.
Trend 3: Americans are flocking to the ‘burbs
The COVID pandemic has sparked debate about the fate of cities. For now, Americans’ move from urban centers to suburbs and smaller cities is “unambiguous,” says Robert Dietz, chief economist at the National Association of Home Builders.
“It’s an acceleration of trends that were already in place,” Dietz says.
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