With eviction and foreclosure moratoriums ending, a mixed political bag, mortgage standards likely tightening, and other factors – one thing is likely: in the words of Bob Dylan, the times they are a changin’. Without a doubt the 2021 housing market is likely to look a little different than the 2020 market, but what does that mean for buyers and sellers? What will the housing market be like in 2021? Let’s take a look at what factors could come into play.
Factor #1: Government Programs and Regulations
This is a big one and also a bit of a wild card. Back in August the Federal Housing Administration (FHA) announced the third extension of its foreclosure and eviction moratorium through Dec 31, 2020, for homeowners with FHA-insured single family mortgages covered under the CARES Act.
There are some other nuances to the CARES act that affect the housing market that will expire at some point or get extended or who knows maybe even get a little boost. Regardless, the point is all this has an effect on housing inventory, not to mention consumer confidence and the economy in general.
The consensus among real estate investors, however, is that many of these programs will expire by year’s end and inventory is likely to go up by Spring, lowering home prices.
The wild card, of course, is the incoming administration and what their plans are for economic recovery and how that might affect incomes, investor and consumer confidence. We’ll let you all hash that one out on your own News Feeds.
Factor #2: Mortgage Rates/Credit Markets and the Fed
While credit standards may tighten, meaning banks and other financial institutions might be a little more choosy than they have been, the Federal Reserve has publicly indicated on more than one occasion that they’re in it for the long haul when it comes to the recovery, which means rates are likely to stay very low as they are now. Mortgage lenders had a very busy year, and that is likely to continue well into next year.
Factor #3: Decreasing Uncertainty
2020 has been awash with uncertainty. A pandemic, an election year – it was bound to be a roller coaster. But with a vaccine on the horizon and the election all but in the rear-view, we don’t see how 2021 couldn’t be at least a little more chilled out *knock on wood*. And when it comes to the housing market, uncertainty typically spooks sellers, so here again we think we’re looking at increased inventory early to mid 2021.
But what does it all mean?
With 2020 nearly at death’s door, it’s tempting to look ahead to the light at the end of the tunnel. 2021 is an enticing prospect after the stress of 2020. We think decreased market uncertainty and other factors will lead to slowly rising inventory. The market may cool overall for investors, but as far as buyers and sellers are concerned (and that’s who we care about here at Partin Real Estate), while buyers are likely to see more housing options, with rates remaining low, demand is likely to remain relatively strong through at least midyear.
Should you buy now or wait?
There are benefits to buying in winter! Want to get a jump on things? Give us a call here at Partin Real Estate. We’ll chat and talk through your options to help you navigate the often confusing world of real estate – no pressure.