While many other industries struggled, the residential housing market grew significantly in 2020; in fact, national home prices rose nearly 11% , a very uncommon metric during an economic downturn. The momentum has continued into 2021.
A handful of factors contributed to the housing market’s performance. In a low interest rate environment, people looking for larger homes during the lockdown, and work-from-home arrangements, residential property sales completely took off. Sales have been on an upward trend over the past year, and do not appear to show signs of slowing down any time soon. The U.S. housing market has seen a 1.6 million net increase in homeowners since first-quarter 2020, according to Pew Research.
Factors contributing to the high demand residential housing market include:
Amid the increasing demand for residential property across the U.S., the housing market has reacted in these ways:
The momentum of the housing market has so far carried over from 2020 into 2021. Buyers are still eager to take advantage of low interest rates while they still can. Meanwhile, home prices may skyrocket to new highs this year: Redfin reported that home prices in March 2021 had risen 16.7% year-over-year, and Realtor.com predicts the trend will continue but at a slower pace in the residential housing market throughout 2021. Zillow predicts 2021 demand in the housing market will see an extra surge in major cities and forecasts a 21.9% annual growth of home sales or a total of nearly 6.9 million homes sold by the end of 2021.
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This article does not constitute legal, accounting or other professional advice. Although the information contained herein is intended to be accurate, Cathay Bank does not assume liability for loss or damage due to reliance on such information.