With peak buying season upon us, here's what analysts are expecting to see this year:
Increasing Mortgage Rates
It appears, depending on how the economic recovery progresses, that mortgage rates could continue to increase. Earlier in the year, rates were holding under 3%, but those rates have steadily increased over the past several weeks. As more and more Americans are vaccinated, it's expected that economic recovery will continue, and this will likely contribute to an upward movement in mortgage rates. If you're thinking of buying this summer, it may be in your best interest to lock in a rate as soon as possible.
Inventories Could Increase
Many home shoppers found the lack of inventory to be a major source of frustration during the past year. It was difficult - if not impossible - to find available properties, and when something went on the market, it was often scooped up in days or sometimes just hours.
Some analysts are expecting to see increased inventory this year. As more people become vaccinated and a general sense of stability returns, home sellers who were deterred from making a move in 2020 will be more likely to list their properties.
Another trend that could continue influencing the real estate market this spring and beyond is an increase in millennial buyers. Nearly five million millennials are set to turn 30 this year, and they now comprise the biggest segment of home buyers. In 2018, millennial homeownership was at record lows, but there's evidence that is changing.
Around 86% of younger millennials and 52% of older ones are buying their first homes, and some are buying luxury properties that are well beyond what you'd consider a starter home.
Millennials will likely drive the market throughout 2021. A survey from the National Association of Home Builders in the fourth quarter of 2020 found that 27% of millennial respondents planned to buy a home in the next 12 months, up from 19% the year before.
The Online Trends Are Growing
Online real estate services grew in functionality and popularity this past year.
3D home tours, virtual agent/broker teleconferencing, and online closings aided by tools like DocuSign are all ways that technology is facilitating a simpler home selling or buying experience. Regardless of the state of the pandemic, the convenience afforded by online real estate technology is here to stay.