How the Rollout of COVID-19 Vaccines Could Affect the U.S. Housing Market |
The coronavirus pandemic and the ensuing financial crisis have caused immeasurable hardship and pain across the U.S. Paradoxically enough, the crisis has also served as a turbocharged shot to the housing market. Feverish buyers rushed into the market just as COVID-19-shy sellers pulled their homes off—forcing buyers into bidding wars and pushing prices up to new heights. Recession be damned.
Now, as the long-awaited vaccines are being rolled out, home buyers and sellers are eager to take real estate's temperature. Will prices finally cool off? Will the big cities come back? And will more homes finally go up for sale? Read more from Realtor.com.
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Homeownership Still More Affordable Than Renting in Most Counties |
Homeownership is a better deal than renting, despite rapidly escalating home prices over the last few months, according to a new study released by ATTOM Data Solutions, a real estate research firm. Owning a median-priced three-bedroom home is more affordable than renting a three-bedroom property in 63%—or 572—of 915 U.S. counties analyzed.
Record low mortgage rates may be helping to offset some of the steeper home prices lately. Median home prices have risen more than average rents in 83% of the counties tracked, the study notes.
“Home prices are rising faster than rents and wages in a majority of the country,” says Todd Teta, chief product officer with ATTOM Data Solutions. “Yet, homeownership is still more affordable, as amazingly low mortgage rates that dropped below 3% are helping to keep the cost of rising home prices in check. It’s startling to see that kind of trend. But it shows how both the cost of renting has been relatively high compared to the cost of ownership and how declining interest rates are having a notable impact on the housing market and homeownership.” Read more from the National Association of Realtors.
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Poll: Consumers Expect Even Hotter 2021 Market |
Sixty percent of home buyers and sellers say they’re optimistic about the housing market in 2021, a leap above 2020’s numbers, according to a new survey commissioned by Redfin. High earners and homeowners are the most upbeat, shows the survey of more than 1,400 people, which was conducted in November and December.
Nearly three-quarters of respondents who earn more than $150,000 say the housing market will fare better in 2021 than 2020, the highest of any other income group. Also, 64% of homeowners believe the housing market this year will outperform last year. Sellers express more optimism than buyers; recent double-digit gains in home prices likely explain seller enthusiasm. Read more from NAR's Realtor Magazine.
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Will Shifting Priorities Lead to More Buyers? |
The nature of real estate is shifting, and we’re continuing to see the impact in the industry.
With the pandemic upheaving nearly everyone’s lives, some engaged couples are skipping their wedding, and instead using that funding toward the purchase of a property, said Adam Segal CEO of Cove. “In general, what you see is when you’re planning for a major spend, like a wedding, you may have built up the disposable income,” said Segal. “There is suddenly more income for large purchases and a home is a very logical and practical next step. Weddings aren’t happening like they used to; it’s a pandemic-related anecdote.” Read more from the PA Association of Realtors.
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Where People Who Want to Relocate Are Going |
About half of Americans say they’re considering a move in the next year, according to a study from LendingTree. But where do they plan to move?
LendingTree researchers analyzed mortgage purchase requests on its platform in 2020 to find the moving patterns of potential buyers in each of the 50 states. They found that a clear majority plan to remain in the state they’re currently living in. Texans, according to the analysis, are the least likely to move to another state. On the other hand, New York has the highest number of residents looking to move out of state, but some aren’t going far. Nearly 25% of relocating New Yorkers are heading to the state next door: New Jersey.
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Good Riddance to Open Floor Plans and Cabinets Galore: Top Kitchen Trends of 2021 |
Homeowners forced by the coronavirus pandemic to hole up in their homes for much of the past year are changing a few things about their homes.
For starters, COVID-19 exposed the flaws of the open floor plans touted on HGTV and other design shows—finding a quiet space to jump on that Zoom meeting with the boss while the kids are remote learning a few feet away can be a logistical nightmare. Fewer homeowners created an open-concept floor plan leading into 2021, according to a recent survey from design and remodeling site Houzz. Read more from Realtor.com.
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Mortgage Market Update
Mortgage Rates Tick Up
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As Treasury yields have risen, it is putting pressure on mortgage rates to move up. While mortgage rates are expected to increase modestly in 2021, they will remain inarguably low, supporting homebuyer demand and leading to continued refinance activity. Borrowers are smart to take advantage of these low rates now and will certainly benefit as a result. |
We hope you enjoyed this week's Market News. For more information about how PMA can help you, please contact us. |
phone: 610.834.8700
Information and analysis is obtained through third parties and is deemed accurate but not guaranteed. Philadelphia Mortgage Advisors is a licensed mortgage lender by the PA Dept. of Banking and Securities, NJ Dept. of Banking & Insurance, the state of DE, the Florida Office of Financial Regulation, MD Mortgage Lender #23004 and VA State Corporation Commission #MC - 6797. NMLS #128570.
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