Wednesday, February 3, 2021 / by Breanna Thornton
2020 was one of the most unexpected years to date. We know that the national economy had some ups and downs throughout the year depending on the virus. We also know that the real estate market managed to stay strong and in some ways, has never been better. With this backdrop in mind, what are experts saying that 2021 has in store for all of us? Take a look at what is expected for the real estate market, the job market, and what opportunities this could open up for you.
1) Real Estate Market
The first question that is frequently asked is if interest rates will continue to remain as low as they are right now. According to an average estimate from Freddie Mac, MBA, and NAR, the industry wrapped up 2020 with an interest rate of 2.95%. This is an incredible number, especially considering the health and political challenges of the year. As we look into 2021, they estimate the interest rate will sit somewhere around 3.0 to 3.5%. This is still an extremely low rate, but can also mean the difference of thousands of dollars in the long run. Take advantage of interest rates before they start to rise!
Another prominent question revolves around the amount of inventory in the market. We have recently seen that the amount of buyers exceeds the amount of sellers by a long shot, making it hard for buyers to find their dream home. Luckily, experts predict that inventory will increase throughout the year due to families selling their homes that are looking for more space in their homes, home offices, etc. However, it will remain a dominant sellers market as long as interest rates remain so low.
2) Job Market
We have seen headlines in recent weeks about thousands of people losing their jobs. While this is frightening and devastating for these households, the economy has a promising forecast.
Many of these jobs were related to the food and entertainment industry since the virus had a new spike. However, since the vaccine has begun distribution, it is predicted that most of these jobs will be recovered.
According to the WSJ Economics Survey and Federal projections, the current unemployment rate is at 6.7%, but will continue to decrease as the next few years come. If this projection follows through, that means that 95% of people in the country that want to work will have a job! This is tremendous progress from when the pandemic originally hit and the unemployment rate was at 14.7%.
3) What does this mean for you?
Whether you are a buyer or a seller, times are good right now! If you are buying, remaining patient through the periods of low inventory is key. Sooner or later, you will find a house that’s right for you and you will get a great deal with how low the rates are. If you’re a seller, now is your time to shine! There are plenty of people out there who would love to take a look at your home. Since median home prices are increasing, you could get more money out of it than you originally ask for.
Image from Chasin’ Mason
Trying to find a job or find a new home is stressful, but this year looks promising. If you have questions about the market, let us know. Happy Wednesday!
Facts from: Realtor.com & https://www.bls.gov/opub/ted/2020/unemployment-rate-rises-to-record-high-14-point-7-percent-in-april-2020.htm#:~:text=The%20unemployment%20rate%20in%20April,to%2023.1%20million%20in%20April.
Header image from https://www.georgewachiuri.com/growth-in-2021-pegged-on-5-tenets/