5 promising real estate trends for home buyers and home sellers in 2021
When the pandemic brought the economy to a halt last year, the Federal Reserve cut interest rates near zero. This move sparked record-low mortgage rates, making first-time home buying suddenly much more affordable and enabling existing homebuyers to qualify for a new loan for a new home purchase. The real estate outlook for 2021 has several more promising trends that both home buyers and home sellers will welcome.
Currently, the mortgage rate for a 30-year fixed-rate loan is 2.65 percent. The Federal Reserve Chairman Powell has already affirmed that the federal funds rate will remain low until the economy recovers.
The incoming Biden administration has proposed several tax measures to make buying a home more affordable. One of President-elect Biden’s proposed taxes would introduce a $15,000 tax credit, to help first-time homebuyers and minorities.
Chief Economist for realtor.com® Danielle Hale’s outlook for 2021 calls for existing home sales to rise 7% over 2020. He expects the sales tempo in 2021 will remain brisk but will ‘take a step back’ from the late 2020 pace of more than 6 million sales.
NAR chief economist Lawrence Yun predicts new-home sales will jump 21%, existing-home sales will rise 9%, and home prices will rise by 3% in 2021.
Zillow is more bullish, forecasting a 10.5% increase in home values in 2021 but notes that buyers could face a slimmer availability of properties. According to Realtor.com, national home inventory in 2020 declined by 39.2% over 2019's numbers.
According to Zillow, Sonoma County home values went up 7.3% in 2020. Zillow’s latest forecast is that home values will rise 10.8% over the next twelve months. If you’re looking to buy a home or put your home up for sale, please contact me so I can help guide you successfully on your real estate journey.