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.