Sellers Will Still Have Upper Hand As Buyers Struggle With Affordability

Dated: March 15 2021

Views: 11

Amid Covid-19 uncertainty, 2021 will be a robust sellers market as home prices hit new highs and buyer competition remains strong, according to the realtor.com 2021 housing forecast released today. Inventory is expected to make a slow but steady comeback, which will give buyers some relief. However, increasing interest rates and prices will make affordability a challenge throughout the year. 

“The 2021 housing market will be much more normal than the wild swings we saw in 2020,” said realtor.com chief economist, Danielle Hale. “Buyers may finally have a better selection of homes to choose from later in the year, but will face a renewed challenge of affordability as prices stay high and mortgage rates rise.”

Prepare for rising mortgage rates

Realtor.com forecasts mortgage rates will continue to hover near 3% then slowly rise to 3.4% by the end of the year. Home sales are expected to increase 7%, and new construction will increase 9% over the previous year. However, the strength of the 2021 housing market is highly dependent on the containment of the Covid-19 pandemic and staving off a double dip recession. 

The forecast projects that prospective buyers will find some relief in 2021 as more homes hit the market, but many will struggle with affordability as home prices continue to rise. Additionally, the time it takes to sell a home will slow from the late 2020’s frenzy, but fast sales will remain in many parts of the country, which will be particularly difficult for first-time buyers learning the ins and outs of home buying. 

Sellers will expand their advantage

Sellers will continue to hold the upper hand throughout 2021 as the number of buyers in the market outweighs the number of homes for sale. Home prices won’t grow as fast as they did in 2020, but steady increases will continue to push home prices to new highs. Additionally, sellers can expect their home to sell relatively quickly in 2021, so having their next home lined up will be key. Many sellers are also buyers themselves, so they will struggle with the same issues when it comes to purchasing their next home.

 2021 Housing Forcast

Blog author image

Jeff Lowery

I'm an expert real estate agent with United Real Est Lexington KY in Lexington, KY and the nearby area, providing home-buyers and sellers with professional, responsive and attentive real estate servic....

Latest Blog Posts

Housing Inventory Hits a Record Low: What It Means for Buyers

Limited selection in the housing market will impact buyers in more ways than one.Though mortgage rates have fluctuated a bit in January, they're still sitting near record lows, making it

Read More

Sellers Will Still Have Upper Hand As Buyers Struggle With Affordability

Amid Covid-19 uncertainty, 2021 will be a robust sellers market as home prices hit new highs and buyer competition remains strong, according to the realtor.com 2021 housing forecast

Read More

Winter has arrived! Winter weather tips for homeowners...

Watch for Water Issues on the RoofExcess SnowfallLarge accumulations of heavy, wet snow can put tremendous pressure on the roofs of homes and buildings. Gravity tends to lend a helping hand with

Read More