John Burns Real Estate Consulting (JBREC) predicts a fresh wave of rental demand on the horizon as inventory remains low and buyer demand remains high. Both the rental and for-sale markets have held up strong during the pandemic due to Americans reevaluating their living situations. Despite many Americans desiring homeownership, now is a good time to rent, says JBREC. Inventory of existing homes dipped 27% year over year in the first quarter of 2021, with regional markets offering just two months of supply. The more popular Southeast and Southwest regions offer less than one month of supply.
2. Housing is expensive and about to get worse.
Home prices rose 13% year over year and our forecast calls for another 15% price appreciation in 2021. The escalation of home prices is a combination of demand outstripping supply and construction cost increases. We also expect mortgage rates to rise, which will contribute to increasing monthly payments. Mortgage payments for existing homes are likely to rise nearly 43% through 2024 due to price appreciation and rising rates. To date, builders have had little pushback on price increases, although we expect that day will come.
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