The housing market has experienced so many changes in the last year, including some who have never seen before. Thirty-year mortgage rates hit historic lows of 2.65% in the week ending January 7, 2021, according to data from Freddie Mac, and fell about one percentage point from a year earlier, when the 30-year rate was 3.64%. On February 25, Freddie Mac reported that the 30-year interest rate had risen to 2.97% but was still close to historic declines. For perspective, over two years earlier, in November 2018, the 30-year mortgage rate was close to two percentage points higher at 4.94%.
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“For the rest of 2021, mortgage rates will increase gradually due to increased financial expenses. We expect mortgage rates at a fixed rate of 30 years to reach 3.24% in the summer, says Jason Gelios, a top-manufacturing broker with Community Choice Realty in southeast Michigan.
With rising mortgage rates, low housing stocks and rising housing prices, what can sellers, buyers and realtors expect from the housing market for the rest of 2021? GOBankingRates interviewed the experts to find out.
What home sellers can expect for the rest of 2021
The seller’s market is stronger than ever due to low inventory in the home. So if you have been on the fence to sell, it may be time to move.
Assistant broker Vincent Cyr from the Cyr Team at Keller Williams said: “There has never been a better seller market in history. For those who want to sell high and have more tolerance and acceptance from buyers for less than perfect homes, 2021 is the year to make it happen. When interest rates rise, pricing will fall. If you are planning to sell next year or two, speed up these plans! ”
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Bill Samuel, a residential property developer and owner of Blue ladder development, offered this insight on how you can take advantage of the current housing market. If you price correctly, expect buyers to go beyond the usual expectations of buying your property. Many buyers outbid the requested price, waive inspection conditions, expedite the closure and do everything else they can to avoid losing a property. ”
What home buyers can expect the rest of 2021
If you are buying a house in 2021, you need to be on top of your game due to the extreme competition from other home buyers.
“Expect a highly competitive market with multiple deals on most properties you are interested in at least in the next few months,” Samuel said. “If current supply and market demand continue for the rest of the year, expect this year to be even more competitive than last year.”
Associated broker Cyr repeats Samuel’s feelings and provides insight into the pricing of existing homes and new construction.
“We expect continued low inventory levels, competitive property bids and higher housing prices. New construction will also increase prices due to higher prices and labor shortages. We see that interest rates remain low but rise higher as the economy improves. This will increase the buyer’s FOMO. ”
Why is the housing inventory so low?
You can thank COVID-19, which bears some responsibility for the lack of new lists. Selling during the pandemic can be difficult, and many people use their homes as their offices, which can make relocation very difficult. But there is another reason. The historically low mortgage rates have resulted in lots of homeowners choosing to refinance their homes, according to a special report from the Consumer Finance Institute.
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“An incredible number of homeowners refinanced their homes in 2020. These homeowners are more likely to stay and enjoy their lower house payments.”
Vander Stelt also believes that quarantines in many states have led homeowners to take a new interest in their current housing, which means that many will not be motivated to sell. “Secondly, the home improvement and improvement sector had a fantastic year 2020. There was nothing to do but stay at home and work at home. Smaller homes will be put on the market in 2021 because so many homeowners improved their homes by 2020 with better maintenance, updates or adding a new feature like a deck, pool or three-season room. ”
What realtors can expect the rest of 2021
Even if the buyer’s market is hot and offers are coming from everywhere, it does not mean that everything will come up roses for realtors.
Assistant broker Cyr said: “Listings are like gold – very difficult to get, but they sell quickly. Buyers consume significant time and energy because agents can write multiple offers for an extended period of time before a customer actually gets a house (and the agent gets paid). Do not let the news hype about the housing market make you assume that real estate agents enjoy this environment. ”
And while buyers are doing the unexpected to be able to get a home right now, this behavior may change before the year is out, according to Samuel. “If the public is confident and comfortable with the prospects for the COVID vaccine and becomes more willing to list their house for sale, it is possible that the increase in supply could level the market and slow it down quite a bit.”
Either way, how realtors sell homes has changed forever due to the pandemic, according to Kris Lippi, a licensed real estate agent and entrepreneur of the popular real estate website ISoldMyHouse.com.
“People working in real estate should already be comfortable with the fact that virtual home travel and remote closures will be here to stay even when the threat of this pandemic has disappeared. The convenience that this gives both sellers and buyers is something that the real estate industry will continue to promote and benefit from. The benefits of this type of arrangement are much more than just avoiding physical contact for fear of getting the virus, which is why they are here to stay. ”
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Last updated: March 1, 2021
This article originally appeared on GOBankingRates.com: What realtors say to expect from the housing market for the rest of 2021