The real estate market for the first half of 2021 took us all by surprise. We experienced a huge demand for buyers with very low inventory, making home prices skyrocket. However, this didn’t deter buyers thanks to some of the lowest interest rates we’ve seen. For sellers, things were looking good, with buyers often putting in offers way above asking price and even offering all cash bids. So, what can we expect moving forward?
Experts are predicting that we’ve hit a slight turning point for the second half of the year. However, the bubble hasn’t burst just yet.
In a recent article from Keeping Current Matters, experts examine the forecast for prices, interest rates, inventory, and home sales. Here are their real estate predictions for the second half of 2021:
While mortgage rates will increase, they will still remain well below what we have seen historically. According to Freddie Mac from Quarterly Forecast, “We forecast that mortgage rates will continue to rise through the end of next year. We estimate the 30-year fixed mortgage rate will average 3.4% in the fourth quarter of 2021, rising to 3.8% in the fourth quarter of 2022.”
When it comes to home appreciation, we still expect numbers to rise, however at a slower rate than what we’ve been seeing at the start of this year. The advice from experts is to buy now, and don’t wait for prices to fall. Joe Seydl, Senior Markets Economist at J.P. Morgan says, ““Homebuyers—interest rates are still historically low, though they are inching up. Housing prices have spiked during the last six-to-nine months, but we don’t expect them to fall soon, and we believe they are more likely to keep rising. If you are looking to purchase a new home, conditions now may be better than 12 months hence.”
Demand is still high for home buyers, and we should see more supply coming into play over the next few months, with new construction builds completing and more people wanting to sell. According to George Ratiu, Senior Economist at realtor.com, “We have seen more new listings this year compared with 2020 in 11 of the last 13 weeks. The influx of new sellers over the last couple of months has been especially helpful in slowing price gains.” He also says that ““As an indicator of the economic impact of housing, there are now 652,000 single-family homes under construction. This is 28% higher than a year ago.”
So overall, things are looking good and we should all remain optimistic.
Want to learn more about our current market and real estate predictions for 2021? Contact us today and let’s chat!