Many experts in the real estate industry expect continued growth for the market in 2021, mostly driven by the impact of the coronavirus pandemic on our lifestyles. Indeed, many of us have spent more time at home than we’re used to, providing us with opportunities to reevaluate what “home” truly means for us.
In case you’ve shelved plans for a home purchase in 2020 due to the competitive market (in addition to other unique challenges), you might be wondering whether or not 2021 is the right time to proceed with your purchasing plans.
Of course, while a lot of factors are still up in the air, many indications of what the 2021 housing market may look like can give you the information you need to make your decision.
In this page, we’ll take a closer look at some of the best reasons to buy real estate in 2021.
Low interest rates
Major players in the real estate industry expect mortgage rates in the low 3% range throughout 2021. According to the Mortgage Bankers Association (MBA), 30-year loans at the start of the year are expected to have an average rate of 3.1%. Fannie Mae expects even lower rates at 2.8%, while Freddie Mac predicts a 3% average rate throughout the rest of the year.
For homebuyers, these low rates will reduce the monthly payment required to purchase a home, which adds more flexibility to their budget, allowing them to afford even higher-priced properties.
A wider selection of properties
While there could be higher prices in some markets, the upside is that buyers will have more options to choose from. Experts predict housing starts to consistently increase in 2021, which means there will be more new construction properties entering the market as the year progresses.
Both the MBA and Fannie Mae expect higher activity levels for single-family construction compared to the last two years.
Opportunity to move somewhere with more outdoor space
In 2020, one of the main reasons why many homebuyers chose to relocate is the need for more usable outdoor space. In a recent report prepared by online real estate platform HomeAdvisor, nearly half of the total households surveyed reported spending at least 27% more on usable outdoor spaces in their homes.
For buyers looking forward to a seamless indoor-outdoor lifestyle, now is the perfect time to look for homes that provide more room for you to relax and soak in the scenery, especially with the larger selection of options available.
Tax credit for first-time buyers
One of the key aspects in President Biden’s $640 billion housing plan is to increase US homeownership by providing first-time buyers with up to $15,000 in down payment assistance. What makes the proposal interesting is that buyers will immediately receive the tax credit during the time of purchase, instead of getting it in the succeeding year after they’ve filed taxes.
The tax credit can effectively eliminate one of the major barriers for millennials burdened by student loan debts and high rent payments, as one of the main reasons why homeownership remains out of reach for many of them is the challenge of saving for a down payment.
A more stable real estate market
Most of the uncertainty brought by 2020 is slowly fading away, and with home price growth potentially slowing down in 2021, it’s unlikely for the housing market to collapse. It’s impossible to know for sure, however, many economists believe there’s a low chance of a housing crash.
After all, record-low mortgage rates are making it more enticing for buyers to enter the market, effectively increasing demand and making home buying stay competitive.
Florida’s strong rental market
The increasing number of listings for sale in Florida is also good news, especially for those planning to invest in real estate. Florida Realtors predicts continued demand for affordable housing in the state as remote work setups become more common for many companies. This could be one of the reasons why Florida’s job market experienced a 2.7% growth in 2020.
Short-term rental investors in Florida will also benefit from the reopening of attractions such as Disney World, Universal World, and Kennedy Space Center, which will likely ensure a sustained demand for short-term rental properties in 2021. Additionally, Florida is known to have the most Airbnb-friendly laws, as the state does not prohibit short-term rentals of residential properties for all cities and counties.
Searching for West Palm Beach real estate for sale? Work with the top real estate professionals in the area today! Get in touch with The Telchin Group at 561-301-0249 or send an email to Eric(at)TheTelchinGroup(dotted)com