2020 has been a challenging year for almost every business; however, you may be wondering if it impacted the housing market positively or negatively? It’s true that when the virus broke out, the flights were canceled, and due to lockdowns, the demand in the housing market went up. This will be discussed in detail later in this housing market predictions. Notably, the housing market is still doing pretty well in real estate. Many people have lost their income sources during this year, and if you’re thinking about going into real estate, it might be a good idea.
So, what exactly were the trends during 2020? The housing market prices went up very quickly when the virus broke out, and the lockdown was imposed in the US – around March – July. Many people wanted to settle down where they were instead of flying out to stay safe from this virus. Furthermore, the market price now is pretty normal – exactly like it was before Covid-19. It is predicted that the sales and prices will continue both rises towards the end of this year but a lot more slowly. Read these Housing Market Predictions 2021 to know more about the business if you want to invest.
Housing Market Crash
You might have a lot of questions about the housing market for the next year and this year’s end. How well is the housing market 2020 doing? Will, all of this affect the US Housing market? Is there something to learn from the housing Crisis of 2008? Will the market actually crash? If it will, then what time of the year? So, what kind of effect will 2020 have in 2021? Read this housing market predictions 2021 guide to determine how things might take a turn with the ongoing pandemic. All of your questions will be answered below.
This can have an adverse effect on the housing market as many people will call you to make their rent or mortgage payments. This can be compared to 2020 when around 6 million of the population failed to pay their rent. Even though the sales keep rising, people still fail to pay their bills due to unemployment, which just leads to loss for the housing market.
So, when exactly will this crash occur in 2021? It is recommended to stay alert around the summer of 2021 or around mid-2021 when the biggest crash might be seen. The reason being that many of the lenders are unable to start the processing of defaults. When the processing starts, it will be an overwhelming demand causing the prices to go up. All of this will cool down around the end of 2021, when hopefully the housing market will be able to go back to normal.
Housing Market 2021
The housing market predictions before the Covid-19 broke out will be discussed later. However, all of the predictions made by real estate agents in the year 2019 for 2021 proved to be wrong because of the pandemic. Instead of 0.8 % price growth, the mortgage rates actually went up to 3.88 %! This is the biggest record in the U.S history ever since the Great Recession. Moreover, the buyers were expecting a lot from this year but had the face losses. So, what are the new housing market 2021 predictions made by the real estate agents?
There is no clarity when it comes to a pandemic; however, most of the predictions have to do with price rates going up and unemployment. A huge fall in GDP might happen during 2021, along with unemployment for many citizens of the U.S, which will lead to a deceleration in the housing market. Due to the SOP’s and social distance rules, the construction will be held back as well. Since the housing market plays a big role in the overall economy of the country, it might affect the U.S in a negative way.
US Housing Market
When it comes to the U.S housing market, it’s quite different from the rest of the world. The opinions differ when it comes to builders – some see the rise in the housing demand as a good thing while others see it as negative due to the increase in pricing. When the demand is higher, the pricing automatically goes up. Especially during times like these, it’s quite normal for this to happen. However, many households fail to pay their mortgage or rent during difficult times like these.
The builders who see it as a positive belief that the vaccine will be created soon, and then the people will be able to pay back. At the same time, the builders who see it as a negative belief that the economy will be affected for a long amount of time even when the virus calms down. The truth is that nothing is certain for the year 2021 in the US.
Here is the housing market 2021 data that might help you out.
- There are higher numbers of listings in the market. Finally, there is some good news for the buyers who only had a few options from most of 2020.
- Last six weeks of improvement. All of the loss due to the Pandemic is improving at a slow speed. Since the last six weeks, only acceleration is seen when it comes to new listings and market conditions. This can have a positive effect on the U.S housing market in 2021.
- 14 days of faster home sales. What does this mean? That people are buying the houses faster despite this being the slower season if compared to previous years. Most of the people buy the houses soon after the listing is done.
All of this is definitely good news for the U.S, and of the rates stay the same, the U.S housing market is on a good path for the rest of the year 2020 and the whole of the year 2021. However, the builders and agents are still recommended to be ready for any blows to the economy and the system.
Housing Market Crash 2021
What was the housing market 2021 predicted to be like before the virus broke out? It will help you get a good idea of the housing market crash. Since the great recession, this U.S has only seen an expansion in the sector of housing. Every year, there is an approximate increase of 1% of the price growth. In the year 2021, the house pricing was expected to go up to 0.8% while the inventory was to remain the same. However, due to covid-19, everything went quite differently than planned. In the year 2021, all of the buyers were saving up and expecting the prices to drop.
Moreover, the buyers believed that investing their money in 2021 in housing will be of great benefit. Every housing market was expecting the housing indices to accelerate before the covid-19. Furthermore, the average house price in the U.S before the pandemic during 2019 was around $259,700, which is 8.0% less than in 2020! Everyone who is a part of the housing market will stay alert during 2021, especially mid-year, to avoid losses.
It’s true that 2020 is going to cause a huge housing Crisis for the U.S; however, the 2008 housing Crisis is also something that can be discussed right now. Along with other professionals, housing agents have been taking a look at the 2008 housing crisis and making their predictions based on that. It might be a good idea to study it and think of solutions for the future of the housing crisis of 2020. So, around 85 years ago, the government decided to support mortgage lending. The government worked on a few policies, programs, and institutions to support middle-class families to buy their own homes. However, many people argue that these policies caused the financial crisis in the following years.
However, later the mortgages ensured that the crisis was not caused by the federal housing administration. So, what was the real cause behind this crisis? The real cause was the mortgage lending and unregulated markets, and this ended up changing the market quite significantly. It was concluded that Fannie Mae and Freddie Mac didn’t cause the crisis, nor did the community reinvestment act. It was purely just the mortgage lending and unregulated markets.
When will the housing market crash?
Even though there is less chance of a house market crash in the U.S in comparison to the other area of the world, there is still a chance. Pandemics are very unpredictable and unclear – almost anything can happen during times like this, and that is why it’s important to stay alert. According to new data, the housing market crashed in March – July in the year 2020, after which it got a little smoother. However, it is also predicted to crash in mid-2021 due to the processing of defaults being a little late. This might cause a few disturbances in the housing market.
However, after mid-2021, everything might start running smoother and go back to normal. This is because after the crash, the processing will finish, and hopefully, the economy will get better as well. However, this all depends on the virus, and everyone knows just how unpredictable that can be. According to another new report, there might be no crash if the U.S market keeps moving as it is at the moment. Even after a significant drop at the start of summer 2021, things might get back to normal soon.
Is the housing market going to crash?
Are you worried that investing in the housing market might be a bad idea? You might be thinking that it’s going to crash like it did in 2008. However, it is a good idea to take a look at the statistics and trends to make your decision. According to many agents, the housing market is far from crashing in the following years. It’s actually going to play an important role in the overall economy of the country. In September 2020, according to the Federal Reserve Bank, the price growth of the housing market is back to normal. However, the salaries are remaining weak for many people, which might cause an issue.
According to our housing market predictions, old home sales have jumped to a number which was last seen in 2006. This is a huge increase, which means strong sales, mortgage applications, etc. However, due to the economy of the country, the interest might pile up, and people will have to pay a huge amount of money for their houses by the time the pandemic is over, and they’re employed again. This will also cause trouble for the builders and agents during the first few years but will be beneficial when the interest starts getting paid off. Around 56 % of the people on the survey conducted in September 2020 thought it might be a good idea to sell instead of buying and vice versa. The normal population is clearly very confused about what to do due to the un-clarity of this pandemic.
US Rental Payment Rates
When it comes to U.S rental payment rates, it seems to be pretty normal. However, there was a big blow during September 2020 when around 6 million households failed to pay their rent, but things have gone back to normal since then. Some people are still paying the rent from that month in installments with low interest in some cases. Only a sudden deceleration might be seen in June 2021, but that’s about it.
Are you going to invest your money in the housing market? Do you think it’s worth it? All of these housing market predictions for 2021 is definitely going to give you a little clarity. However, you need to remember that even the specialists and professionals are not sure of anything at the moment. Investing your money is a risk in almost any business at the moment. The economic conditions at the moment are much unexpected – every lockdown leads to a dip in the economy. Hopefully, 2021 will lead to a gradual recovery in the economic sector of the U.S.