Here are the latest housing market predictions for 2021 & 2022
According to Norada, Real Estate Investments, here are the latest housing market predictions for 2021 & 2022. It has been roughly one year when the pandemic put the housing market on hold for several months last spring. But the real estate market bounced back rather quickly. For nearly a year now, low mortgage rates and an increase in working from home ignited by the pandemic have fueled a rapid increase in housing demand — especially in lower-density suburbs. Despite uncertain economic times, there has been a booming residential housing market.
More existing homes were sold in 2020 than in any year since 2006. Many market watchers are curious to know how long will this housing boom last or will the market eventually crash? Well, so far, the housing market continues to be sizzling hot resulting in higher home prices and quick-selling homes. The Federal Reserve is playing a key role to support the economy and housing market by keeping borrowing costs low for shorter-term loans.
It has a huge impact on all kinds of interest rates, including mortgage rates, through its control of short-term interest rates. Fed is also helping to keep mortgage rates low by purchasing sizable amounts ($40 billion worth every month) of agency mortgage-backed securities (MBS). The Fed has also indicated it plans to keep rates low at least until 2022.
As we head towards the peak home-buying season, the demand remains strong but the housing supply still lags behind. Buyers who are currently struggling to find a house are likely to see improvement in the number of listings available to them as more sellers list their houses for the spring buying season. In March 2021, the existing home sales fell 3.7% from the prior month to a seasonally-adjusted annual rate of 6.01 million.
Housing sales in all major regions of the country declined. It marks two consecutive months of decline in home sales, according to the latest data released by the National Association of Realtors. Earlier in February, sales had dropped to a six-month low in(the lowest level since September 2020) to an annual rate of 6.22 million. From one year ago when home sales first started to fall due to the pandemic, sales are higher by 12.3%. While each of the four major U.S. regions experienced month-over-month drops, all four areas welcomed year-over-year gains in home sales.
Single-family home sales decreased to a seasonally-adjusted annual rate of 5.30 million in March 2021, down 4.3% from 5.54 million in February, and up 10.4% from one year ago. Realtor.com's Market Hotness Index revealed that the hottest metro areas in March were Manchester, N.H.; Concord, N.H.; Vallejo, Calif.; Burlington, N.C.; and Springfield, Ohio.
Despite the drop in home sales housing market continues strong even as mortgage rates tick up to the highest levels this year amid rising long-term bond yields. The housing market has been struggling to keep up with the demand for the past decade. The pandemic has led to a surge in demand. The median sales price of an existing home has risen 17.2% from last year and they have increased even more in some regions of the country.
It has reached a historic high of $329,100, with all regions posting double-digit price gains. March's national price jump marks 109 straight months of year-over-year gains. The median existing single-family home price was $334,500 in March, up 18.4% from March 2020. The main reason in the drop of sales in the lack of supply. The inventory of homes for sale slightly rose to 1.07 million units, down by 28.2% year-over-year. Unsold inventory for single-family homes sits at a 2.1-month supply at the current sales pace.