Key Highlights
- Part II of two-part series on 2021 housing market forecasts from real estate experts, economists, association professionals and investors
- Part II features experts from Asian American Real Estate Association of America, Redfin, National Association of Real Estate Brokers, National Rental Home Council, National Association of Hispanic Real Estate Professionals, National Association of REALTORS ®, Easy Knock, Lending Tree, Bair & Warner, Wharton school at University of Pennsylvania, Zillow and Harbor
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Part I in this two-part series on 2021 housing market forecasts indicated that most experts highlighted here generally agreed that housing supplies would remain low though very gradually improve, mortgage interest rates would remain low though slightly increase by the end of 2021, sales would continue remain high and then taper, prices would remain high and then taper and that strong buyer demand would remain constant throughout 2021, we’ll focus on additional data points, insights and opinions that enhance these fairly consensus forecasts.
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Amy Kong – President of the Asian American Real Estate Association of America
Kong points out that Asian American households have seen the largest income growth, nearly +8%, of any racial/ethnic group in the US over the past 15 years. The national income growth during this same period of time was +2.3%. Additionally, more than +54% of Asian Americans have earned a minimum of a bachelor’s degree compared to the national average of 32%.
In a low interest rate environment, Kong projects that Asian American educational levels and income levels will continue to increase homeownership, particularly in the Southwest and Southeast regions of the US, within this community despite pandemic-related job losses and business closings.
Daryl Fairweather, Chief Economist with Redfin
Fairweather believes that 2021 will see more home sales than any other year since 2006, an increase of +20% on top of 2020’s increase of +5%. Not only will Americans continue buying homes to reflect their shifting working and lifestyle choices and options, US mortgage-backed securities will become increasing attractive to international investors
Fairweather predicts the homeownership rate in the US to surpass +69% for the first time since 2005.
Antoine Thompson, Executive Director with the National Association of Real Estate Brokers
Along with a continued low interest rate environment, Thompson believes that the new Congress will approve Biden-Harris funding and legislation for a new closing cost and down payment assistance program and/or tax credit to increase African American and minority homeownership rates.
Thompson also predicts pressure by housing and civil rights groups to re-establish fair housing and community reinvestment policies rolled by the Trump administration.
David Howard – Executive Director of the National Rental Home Council
Howard will be closely watching supply and affordability within the rental home sector of the housing industry . Because the Millennial generation has not had the opportunity to generate comparable wealth levels as their cohorts in the past, Millennials will drive single-family rental housing as it takes them a little longer to realize their dreams of homeownership.
Gary Acosta – Co-founder and CEO with the National Association of Hispanic Real Estate Professionals
Already home to many Hispanics and great numbers of newcomer/relocating buyers, Acosta predicts that Texas will benefit from the highest number of new homeowners. Acosta sees low interest rates fueling homeownership in the first two quarters of 2021 and employment gains in the second half of the year doing the same. He also sees flattening home prices in California and New York with San Francisco and Manhattan continuing to take the biggest hits as remote workers continue to exit these markets.
Lawrence Yun – Chief Economist with the National Association of REALTORS
Yun believes the job market will improve as COVID vaccinations become more and more available, interest rates will remain low and that increasing single-family home starts throughout the year will help supply. Yun sees even stronger demand in the suburbs and more affordable secondary metros
Steve Baird – President and CEO of Bair & Warner
Baird believes buyers are envisioning a new normal, not a return to normal. The center of this new normal is a home that accommodates living, working, learning and entertaining. He also expects that the desire/demand to own secondary residences will continue through 2021.
Jared Kessler – Co-founder and CEO of EasyKnock
Kessler believes that second-tier markets such as Austin Tampa and Charlotte, already well-identified by consumers wanting more affordability, will experience a residential building boom. He also believes that alternative financing options will become more widely available to both new and existing homeowners and renters in order that they may remain in their homes.
Tendayi Kapfidze – Chief Economist with LendingTree
Kapfidze believes the housing industry will continue to shine brightly in 2021. Continued low interest rates, the savings rollover from 2020 and additional fiscal stimulus are likely. He also believes that job losses are moving up the income scale as are temporary job losses becoming permanent. Kapfidze is the first expert in this list of housing experts to even mention the rent crisis for both tenants and owners but has offered no predictions about this explosive area within housing.
Susan Wachter, Sussman Professor of Real Estate and Finance at the Wharton School of the University of Pennsylvania
Wachter believes that Millennials will be the defining demographic group in housing for years to come. Along with al the other “standard” predictions mentioned in Parts I & II, Wachter also forecasts that inflation may begin to emerge in 2021.
Jeff Tucker – Senior Economist with Zillow
Tucker believes the bull housing market will continue well into the autumn of 2021. He also sees value appreciation approaching 9% or 10% by July and then cooling a bit to 7% going forward. With housing inventory being down more than one-third y/y, Tucker sees continuing competition among buyers. And, despite new homebuilders frantically trying to catch up to compensate for the accumulated building deficit from 2008 to 2019, he believes it will take a long time for them to do so.
Daniel Kessler – Chief Executive of Harbor
Kessler is highly focused on technology directed to home safety/security and self-sufficiency/home maintenance as natural disasters and uncertainties become more and more constants in our daily work and personal lives being lived at home. He believes that consumers will need and demand security/safety/emergency preparedness and home management technology throughout the homes of 2021 and beyond.
Thanks to Fortune.
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