Will The Home Buying Season Be Extended?
Carey Chesney4-minute Read
April 30, 2021
Anyone who follows real estate trends knows they are pretty seasonal. Spring is often referred to as the “home buying season,” as many homeowners decide to buy new houses in preparation for the summer and fall. In the winter, inventory tends to dwindle, and buyers can usually look for “deals'' with fewer buyers searching and competing for the same houses. However, this trend has been turned on its head in 2021 by the COVID-19 pandemic. Inventory is still very low nationally, but the amount of winter buyers is way up.
Why? It most likely has to do with a few key factors, including low interest rates and more time spent in your home considering your space and listing must-haves for your next place.
One of the biggest questions crossing the minds of real estate buyers and sellers in 2020 was if the home buying season will be extended, and if summer will be the new spring. This hypothesis proved to be true in 2020. The question now is when to buy a house in 2021 and whether the hot market season we are seeing this winter will be extended to the spring and beyond.
Are People Buying Homes In 2021?
The spring months are historically the most popular time to buy a home, but we are seeing a very hot winter market. With that being said, let’s try and predict 2021’s real estate trends and determine how they’ve been affected by COVID-19.
This year started off with a continuing surge in mortgage applications, as well as many buyers eager to begin house hunting in January. The home buying season was kicking off early in 2020 as well, but the second half of March was impacted by statewide shutdowns and social distancing rules. This caused many open houses to get cancelled and left real estate professionals without jobs. Assuming we don’t face a similar situation in spring 2021, the future is looking pretty rosy for the real estate market. With vaccine distribution underway and the hope that the worst of the pandemic is behind us, there’s no reason to think the unusually active January market won't continue through the rest of the year.
Buying A Home During COVID-19
Clearly COVID-19 has had a significant impact on nearly everyone’s daily lives, as well as on the government and the economy. It has also largely influenced the home buying and selling processes, and affected the nation’s real estate trends significantly for the beginning of 2021. The 2020 spring market was put on pause by the pandemic, but then came storming back and went well into the summer and fall. And much like the snow in some parts of the country right now, it doesn't show signs of stopping!
First, you should know that home prices are rising. This is a result of low interest rates and a limited inventory for home buyers to look at. In addition, the demand for buying a home is increasing, as many homeowners were stuck inside during the stay-at-home orders. We all had a good, long think about where we want to be if we are forced to quarantine with our whole family.
Although home prices were rising slowly during the early months of COVID-19, prices are rising at a much higher rate in the beginning of 2021. As home prices rise, mortgage interest rates will likely continue to stay low until the economy returns to normal. In the meantime, buyers will be more motivated to buy a home now and receive a lower interest rate. And one of the largest demographics looking to buy homes at this time is millennials.
Now, let’s take a look at how these real estate trends will affect the buyer’s and seller’s markets.
When it comes to the 2021 buyer’s market, some potential buyers will want to go through with a new purchase, while others may want to delay it. Especially with the rise of home prices and the number of people searching for homes in the beginning of 2021, buyers might be wary of purchasing a new home at this time. But if a potential buyer is still hoping to move, it’s important they know how much they can afford and they stick to that budget. It can be helpful for home buyers to consult or work with a buyer’s agent who can help them find a home for the best price possible.
Because mortgage interest rates are low, buyers might also be more interested in buying a house now because they could qualify for better loan terms and a higher purchase price than this time last year. For all of these reasons the buyer’s market is expected to significantly pick up for the remainder of 2021.
After months stuck inside during quarantine, many potential sellers have realized that it’s time to move out of their houses. The early 2021, the seller’s market has been historically hot, with houses often creating bidding wars and being sold for significantly more than their asking price. Currently, as home prices rise, many sellers may benefit by making a nice profit. Sellers should also make sure that they’re aware of their competition and settle on the right offer.
Will The Housing Market Crash Later In 2021?
Not likely. Mashvisor conducted a real estate market analysis and talked to a few experts who revealed their thoughts on the forecast for a housing market crash in 2021. The general consensus is that we won't see a real estate market crash next year. In fact, it’s shaping up to be quite the opposite.
The Bottom Line
Although 2020 proved to be an abnormal year for home buyers and real estate professionals alike, it looks like the home buying season in 2021 could be historically good. In the meantime, check out our other resources for real estate agents!
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