Spring is always an interesting and exciting time in real estate, so what are analysts expecting we can see this year?
Increasing Mortgage Rates
It appears, depending on how the economic recovery comes along, that mortgage rates could continue to increase. Rates have been on the rise for weeks, while earlier in the year, they were holding under 3%. Analysts believe that it would be a good time for borrowers to try and lock in low rates now, with the anticipation they’ll tick upward through the year.
The 30-year fixed-rate mortgage is anticipated to average 3.1% through the spring months, while it was averaging 2.9% during the first quarter of the year, according to Fannie Mae.
It’s almost universally agreed that as more Americans are vaccinated, there will be more economic recovery, and therefore an upward movement in mortgage rates.
While there may be a slowdown compared to the hot market of the past year, there’s an expectation there won’t be a major crash. Price appreciation could slow down, and new homes might build up a bit more.
Inventories Could Increase
Homebuyers or would-be homebuyers often felt frustration over the past year. It was difficult if not impossible, to find available properties, and when something went on the market, it would be scooped up in days or sometimes just hours.
Now, however, homeowners may be more likely to list properties because more people are vaccinated, so there will be less of a fear of catching COVID-19 from people coming into their homes.
While there is the expectation that inventories will increase, there may still remain limited options, particularly in some markets.
Another trend that could continue influencing the real estate market this spring and beyond is millennials. Nearly five million millennials are set to turn 30 this year, and they’re now making up the biggest segment of home buyers. In 2018, millennial homeownership was at record lows, but there’s evidence that’s changing.
Around 86% of younger millennials and 52% of older ones are buying first homes, and some are buying luxury properties that are well beyond what you think of as a starter home.
Millennials will likely drive the market throughout 2021. There was a survey from the National Association of Home Builders in the fourth quarter of 2020 that found 27% of millennial respondents said they planned to buy a home in the next 12 months, up from 19% in a previous survey.
The Online Trends Are Growing
Online real estate services are continuing to grow in popularity, and regardless of the state of the pandemic, that’s unlikely to change.
There are so many ways technology was accelerated in real estate over the past year. From virtual showings to the use of a fully virtual agent to mobile or online closings, there are a lot of ways that technology is facilitating a simpler home selling or buying experience. It’s becoming increasingly possible to buy or sell a home without ever leaving your current home.