Housing remains strong as 2020 closes and 2021 nears. That’s the general trend, although the context of the message has many permutations, says Shalom Lamm. First, real estate in late 2020 and predictions of real estate in 2021 is not necessarily following the markets or the economy. Toward the close of 2020 buyers who have possibly been tipped by record-low interest rates and at the same time, a limited amount of home units available. According to the U.S. Census Bureau, home vacancies are at .9 percent of vacancies, in statistics that were just released on October 27th of this year. According to Zillow, this means that homebuyers should expect around a 2,9 percent increase in home prices by end of the year. And while it is true that over 12 million people are unemployed, primarily due to the COVID-19 pandemic, many people are in a good position to buy a home. However, it’s currently a seller’s market, as the amount of inventory of available homes has shrunk. Those who decide that now is the time to buy are jumping on the bandwagon now to buy. The average time homes sit on the markets has shrunk from around 56 days, on average to around 42 days. Is that really fast? Yes. According to Zillow, in 2018 by comparison, houses spent from 65 days to as many as 93 days. In 2019, the average time on the market was 70 days.
What about the home market 2021?
First of all, Zillow predicts that overall, home prices will rise around 7.8 percent in 2021. The good news is that interest rates on home loans, which have dropped to as low as 3.09 percent, a record low. And while different economists predict different results, it’s generally agreed that home loan rates will remain low in 2021, perhaps creeping up to 3.5 percent, but certainly remaining low. The bad news is that while home loan interest rates are at an all-time low, the bad news is that lenders are significantly tightening up their standards for approving such loans. Those with marginal credit scores will be left out of the picture, and even if the credit of a potential homebuyer is good, that may not be enough. Expect lenders to require as many as 7 months worth of paystubs, and expect them to call your employer to not only verify your employment but do have a thorough discussion over how the COVID=19 has affected their business. In short, in the late 2020 to 2021 timeframe. who you work for, and the state of their local economy may be as important as their creditworthiness. Whether the housing inventory will significantly change of course, depends upon the COVID-19 situation. Keep an eye on the vaccine station and whether an effective vaccine will be developed to conquer the disease. Until then, it looks like a continuation of the fall in the United States for the housing industry until at least springtime, where those who can get the financing pounce on the homes available for sale and those who can’t manage the financing will need to wait till both the health of the nation and the economy improves. Shalom Lamm says to keep yourself updated on these market trends if you’re interested in buying a home.