A bright spot in an otherwise dreary 2020 was the residential real estate market. After briefly retrenching at the beginning of the pandemic, home sales soared. A lack of homes on the market and low mortgage rates caused prices to skyrocket. Rising prices lifted home values, creating more wealth for homeowners. Search www.rehava.com for Homes for sale in Flying Horse Colorado Springs, Colorado.
However, not everything was rosy. As of this month, 5.2 percent of mortgages, or 2.7 million, are in forbearance, according to Black Knight, a mortgage data and technology company. That represents $547 billion in unpaid principal.
Many experts predict another strong housing market in 2021. The forecast increased demand from buyers who delayed purchasing homes because of the pandemic. As well as, existing homeowners who need larger spaces. These spaces are used to accommodate parents working from home. Also, children attending school virtually. There will also be buyers from condo owners who are seeking to escape multifamily buildings. They want single-family houses to mitigate exposure to the virus. The ability to tour homes and close on purchases virtually will make buying a home simpler in 2021.
Young adults fueled the increase in home sales in 2020. Millennials making up the largest share of home buyers at 38 percent. Higher wage earners account for home sales in 2020. They were less affected by the pandemic’s financial repercussions.
First-time buyers are likely to face headwinds in 2021. Buyers need more money than ever before to buy a home. According to the National Association of Realtors, the median household income of first-time buyers in 2020 was $80,000. This is up from $68,703 in 2019. The median household income of repeat buyers was $106,700.
Affordability worsened in much of the United States. In the fourth quarter of last year median home prices were up at least 10 percent in most of the nation. Home sales set a number of records last year. That is despite the coronavirus pandemic. Although the final data for 2020 has not been released, the trade association expects new-home sales to come in 20 percent higher than in 2019. Existing-home sales to come in 3 percent higher than in 2019. NAR chief economist Lawrence Yun, predicts new-home sales will jump 21 percent and existing-home sales will climb 9 percent in 2021. He predicts home prices will rise by 3 percent in 2021.
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