Housing Market 2021, Another Housing Crash?
While the housing market has surprised the expectations for 2020, the flow of new listings is still lower than that of previous years.
Instead of a housing crash as many others predicted, the opposite happened and it outperformed mostly due to low mortgage interest rates.
Heading into the new year ahead of 2021, what most people fear is that the lowest mortgage interest rates which hit historic lows this year are going to go up again making monthly housing payments more expensive.
According to Realtor.com, “Realtor.com’s 2021 housing forecast predicts record-high prices will continue rising in 2021, delivering a blow to first-time buyers and those on a budget.”
This has caused so little houses to become on the market that investors are predicting that this will still be the case in 2021.
So many were prompted renters to buy homes in the hopes of more space or leaving crowded spaces to more suburban areas due to the virus.
And with no inventory, that means higher competition and higher prices.
The current state of the housing market has been making it relatively hard for you to find your dream home as competition and inventory are presenting challenges for people to find that dream home.
Recently, the “Federal Housing Finance Agency (FHFA) will begin charging a mortgage refinance fee that could impact the cost of your mortgage.”
The fee could have unexpected costs of $500 for every $100,000 homeowner’s borrow.
Forbes stated, “Although the 0.5% fee, known as the “adverse market refinance fee,” will be added to any refinanced mortgages completed beginning today, some borrowers who have closed their loans within the last several weeks likely are paying this fee.”
However, refinancing still lowers your mortgage rate and can still cut your savings considerably.
And before you determine how this can affect you, you can discuss with your borrower to determine how much you can save by refinancing.
2020 has taught us that anything can happen and that everything can change in an instant.
With unemployment rates still a concern and with rising cases causing more lockdowns, the high prices could be a concern for the next year.
The housing market has ties with the economy, and if more people can’t afford the housing market could be facing another challenge.
Realtor.com stated, “Prices are expected to jump 5.7% next year as a result of more properties forecast to hit the market, particularly in the second half of next year.”
With that in mind, if the pursuit of private space is due to working from home, there is a chance that more sellers will consider buying.
The housing market has stood its own and outperformed despite what brokers and investors anticipated after the initial lockdown in March.
“Most housing experts believe the wave of across the board home price slashing and desperate sell-offs that characterized the aftermath of the Great Recession are far less likely to materialize this time around.”
Another positive aspect is that the number of people who are on forbearance plans has been dropping for 11 straight weeks.
Fannie Mae, Freddie Mac, and Ginnie Mae loans all started a decline since the forbearance rate has dropped.
As well as the recent release of a vaccine to this virus that could be distributed to us hopefully in the near future.
In the hopes that 2021 will change the economy for the better as we try to navigate the changes of the virus, there is hope for those new home buyers as there is the possibility that more homes could be more available in the future.
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