The modern housing market has not seen a pandemic like Covid-19, so many people have been cautiously watching the trends as the economy has been upended, and the jobs market almost unrecognizable.
The good news is that overall trends indicate people are optimistic, and home sales are on the rise in 2021. Here’s why the market is starting to heat up, and why buyers are staying optimistic about this home-buying season.
Done Delaying Decisions
There’s no doubt that the pandemic rocked the jobs sector to its core. With millions of people sent home from their offices or placed on furlough, the housing market took a big hit. Buyers who had been hoping to make a home purchase or seek a mortgage held back and stayed put, uncertain how long the pandemic would last and whether their job—and income—would remain stable.
However, as businesses worked out remote work with employees and were able to bring back furloughed workers, the market began to stabilize. Towards the end of 2020, with the presidential election wrapping up and promises of several vaccine rollouts in the future, home buyers finally felt confident enough to start looking again.
New Home Starts Ramp Up
Covid-19 brought many industries to a grinding halt, including new home construction. While initially home sales dipped in 2020 as many people faced economic uncertainty, towards the end of the year sales began to climb again, and the tight squeeze between supply and demand drove prices up in some markets.
Thankfully with safety precautions and states rolling out vaccination plans, new home construction in the first few months of 2021 has begun to create some space in the housing market and restored some balance for eager home buyers. Lumber prices are expected to fall as the year progresses, which should ease affordability pressures in new home prices.
Existing mills can bring vaccinated employees back, and new mills are eager to come online to take advantage of the pricing. The increased supply will mean more affordable new construction in the latter half of 2021.
Mortgages in the Mix
Once it became obvious that the pandemic was a long-term issue, questions arose as to how many people were in danger of defaulting on mortgages, but the crisis does not appear to be as widespread as initially feared. In fact, indications point to this being a seller’s market as a result of strong competition.
While obtaining a mortgage in 2021 is likely to be more costly, the expected new construction should help mitigate the rise in mortgage prices. Mortgage rates are still holding at just under 3%, and a lot of buyers are hoping to get locked into these low rates before they inevitably rise.
Still Unsure What to Do?
Nothing beats checking in with the experts when it comes to a big decision like buying a home. If you’re wondering if now is the right time for you to get into the market for a home, this is a great time to call our office at (844) 765-6844. Our experts can help you understand your mortgage options!