The 2020 Housing Issues Sticking Around This Year
Low inventory, high home prices, working from home, rising home values—all these factors were a part of the flourishing housing market this year, but will they continue on through 2021? Many problems from 2020 will live on, says the Washington Post, such as housing affordability. In 2019, the median household income of first-time buyers was $68,703. One year later, and first-time buyers’ median income is now $80,000. And more than half of U.S. counties became less affordable during the fourth quarter of 2020 than other quarters last year, according to Attom Data Solutions’ report.
Here’s a look at what the housing experts expect in 2021:
National Association of Realtors
Home sales set a number of records this year despite — and in some cases, because of — the coronavirus pandemic. Although the final data for 2020 has not been released, the trade association for real estate agents expects new home sales to come in 20 percent higher and existing home sales to come in 3 percent higher than 2019. NAR chief economist Lawrence Yun predicts new home sales will jump 21 percent and existing home sales to climb 9 percent in 2021.
“The second-order housing demand arising from remote work flexibility and changing housing preference will continue next year,” he said.
Yun predicts home prices will rise by 3 percent in 2021.
“The consequent rise in home prices have boosted wealth accumulation for homeowners,” Yun said. “But the opposite side of this will mean the continued decline of housing affordability and will limit future homeownership opportunities for young adults if housing supply is not greatly increased.”