While the real estate industry has stayed relatively strong amidst the pandemic, there have still been difficulties over this past year. Some big ones are historic demand coupled with rising home prices and low inventory.
Thankfully, according to the National Association of Realtors (NAR), there’s some good news on the horizon! In a recent study, they found that pending home sales increased by 1.9% after two consecutive months of decline.
What does this mean for you and your potential sales this year? Read on to find out.
Positive Outlooks Abound
The rise in pending home sales (a forward-looking indicator of closed sales based on contract signings), is seen by many in the industry as a sign of a strong recovery this year and beyond.
With lowering COVID-19 infection rates, increasing vaccination rates, and an expected economic boom, NAR analysts are cautiously optimistic that some of the recent issues that have plagued the industry may ease up over the next few years.
Possible Low Inventory Improvements
One reason industry leaders expect a rise in housing supply this year due to the continuing rise of demand - and the new construction that needs to match.
“The increase in pending sales transactions for the month of March is indicative of high housing demand,” said Lawrence Yun, NAR's chief economist. “Low inventory has been a consistent problem, but more inventory will show up as new home construction intensifies in the coming months, as well as from a steady wind-down of the mortgage forbearance program."
“Although these moves won't immediately replenish low supply,” Yun continued, “they will be a step forward.”
If you have clients who are struggling to find a home that meets their needs or budget, this year may be the year where something opens up for them!
Doug Duncan, chief economist at Fannie Mae, said the supply of existing homes for sale and an elevated level of new homes sold — but not yet constructed — should help bolster a strong construction pace of new housing starts as we move into the spring buying season.
According to NAR’s data, existing-home sales are projected to rise by 10% in 2021 to reach 6.2 million in 2021, while the median home price is anticipated to increase by 9% in 2021 to $323,900. Housing starts are forecasted to reach 1.6 million in 2021 and 1.7 million in 2022, providing much-needed relief to the housing inventory deficit.
No matter what lies ahead, we’re confident that you will help make your client’s housing dreams a reality. Remember, if you need anything - whether it’s insight on new industry strategies or professional development classes that advance your career, we’re here to help!
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