As the US economy recovers from the 2020 recession, the housing market is expected to boom this year. According to the research data analyzed and published by Comprar Acciones, 2021 could see the most robust housing market since 2006, with growth in annual home sales soaring to 10%. That will be double the 5% growth seen in 2020.
Sales volume for existing houses soared by 5.9% in 2020 reaching 5.7 million units according to Zillow. The performance will be pale in comparison to 2021, when sales volume will soar by 21.9% to 6.9 million units.
14.5 Million People to Relocate Cross-County in 2021
Among the factors driving industry growth is record low mortgage rates. The rate of the 30-year-fixed mortgage will rise gradually from 2.7% to 3% per Redfin’s data.
New house listings that declined by 3% in 2020 will increase by 5% in 2021. As a result of the increase in listings and the low mortgage rate, price growth will slow down. From a growth rate of 6% in 2020, it will drop below 5% in 2021.
Moreover, the number of homes constructed will be the highest in 15 years. According to Norada, the number of homes for sale decreased by 30% in 2020. But between September and November 2020, building permits soared by 21% year-over-year (YoY).
The number of people relocating cross-county will surpass 14.5 million in 2021, a 25% increase over 2018’s 11.4 million. Remote work will drive a high number of relocations from cities to more affordable areas, increasing home ownership overall. By the end of 2021, the rate of home ownership will rise to 70%.
According to a study by SP Global, residential mortgage originations which hit $4 trillion in 2020 will surpass $3 trillion in 2021. Based on Black Knight data, 90-day default activity shot up by 250% in 2020, to 2.6 million. On the other hand, foreclosure and completions declined by 67% and 70%, respectively.
