Despite the Pandemic, the US housing market was on fire this past year. By and large, sales were fueled by record low mortgage rates that provided greater purchasing power, especially for first-time Millennial and Gen-Z home buyers.
Not surprisingly, economists seem to unanimously agree that housing demand will continue to outstrip supply in 2021. Annual sales growth is expected to increase from 5% in 2020 to over 10% in 2021, with home value appreciation approaching 7%-9%. If these forecasts are correct, we will likely see the homeownership rate rise above 69% for the first time since 2005.
Location preferences are changing too. As more companies announce plans to transition employees to work from home permanently, housing demand will be more robust in outlying suburbs and rural areas as people redefine what home means for them and search for a lower cost of living.
A wildcard heading into 2021 are foreclosures. As the Pandemic continues, so does forbearance and the rise in delinquency rates. The moratoriums on evictions and foreclosures continue to be extended, but as mass vaccination rolls out, the moratoriums will end later in 2021. The current forecasted result will be 300,000+ foreclosures nationwide.