Predictions about the 2021 Housing Market

With 2021 right around the corner, MReport released an article highlighting experts’ anticipations for the housing market next year. The National Association of Realtors recently released a report with their outlook on the economy and housing market for 2021. The report included predictions from over 20 economic and housing experts. According to the report, experts predict the economy will begin to bounce back from the damage caused by COVID-19. Economic experts anticipate a GDP growth of 3.5%. In addition, they expect the annual unemployment rate will be 6.2% next year, and will continue to drop 5.0% by 2022. Expert Lawrence Yun stated, “Before the pandemic, America experienced the longest economic expansion ever—10 straight years of job creation. That was 20 million jobs. But in a single month, we lost all the 10 years of gain in the single month of April”. Yun believes that a second stimulus package would be beneficial for many Americans. He added that he believes without another stimulus package, there could be another modest recession. The report included the effects remote work may have on future employment. Experts predict 18% of American workers will be working remotely in 2021. This is a 3% decrease from 2020. This number is predicted to drop to 12% in 2022.

WHAT DID EXPERTS PREDICT?

While the economy struggled in 2020, the housing market did surprisingly well. Despite major challenges, low mortgage rates encouraged home buying activity. Expert Yun stated, “To our surprise, the housing market not only recovered but then some, roaring past the pre-pandemic activity levels with strong activity”. According to the report, the housing market will continue to thrive next year. Housing experts expect the average annual 30-year fixed mortgage rates will be 3.0%. The annual median home price should increase by 8.0% in 2021. By 2022, it will increase by 5.5%. Low mortgage rates and working from home played a crucial role in keeping the housing market afloat during this challenging year. Fortunately, 2020 is almost over and 2021 is looking good already.

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