Housing Market and Stock Market Forecasts

Housing Market

 

US Housing Market Sales & Price Forecast

The US Housing Market Forecast Report is the single most comprehensive view available on residential real estate in the US. You’ll find all the data, videos, charts, expert opinions and predictions vital to your decision to buy or sell a home this year.

You’ll find data and resources from NAR, Zillow, BEA, Mansion Global, CBO, Knoema, Freddie Mac, and other authoritative sources below in this extensive review of the US housing market and the new home construction market. See more on the spring housing market outlook, and 5 year forecast.

 

Home Prices SkyRocketing

US Home prices are on tear of late, 15.8% higher than one year ago to $313,000 on average, while sales fell 6.6% in February.  Given stimulus and growing employment and GDP, the odds of a housing market crash are remote. It’s highly likely the government will take action as home prices soar, and this could upset the apple cart.

US Housing inventory sits at a record-low of 1.03 million units, (-29.5% year-over-year) where properties sell in less than 20 days, the fastest ever.  Everything in the housing market will be a record this year as house construction ramps back up (1,421,000 units in Feb, down 9.3%). Many buyers will find their desired home finally, but at a steep price.

 

A record number of mortgages for second homes are being taken out, which further magnifies demand.

Please do share this post with others who might be considering buying or selling this year.

Recent, Up to Date Real Estate Stats!

See the California housing market, Florida housing market, New York real estate report, and Illinois housing market report.

Hopefully, this resource will save you time in understanding and keeping up to date on the housing market.

 

 

Housing Market Report Sections:

  1. Projections for Growth
  2. Optimism for 2021
  3. Should You Buy a House This Year?
  4. Is a Housing Market Crash Even Thinkable?
  5. 28 Key Factors Driving the Market
  6. Will the Recovery Add Fuel?
  7. Hottest State Housing Markets
  8. Predicting the Housing Market
  9. What’s Happened in the Housing Market in 2020?
  10. Who Are US Realtors
  11. How US Realtors Market Your Home
  12. January Housing Market Report
  13. Hottest Cities in the US
  14. Residential Real Estate Forecast & Predictions
  15. New Home Construction
  16. Housing Affordability
  17. Mortgage rates
  18. Mortgage Forbearance, Delinquency and Foreclosure Report
  19. The US Economy
  20. Realtor Housing Recovery Index
  21. Which Housing Markets Will Do Best in 2021?
  22. Will the Housing Boom Continue?

 1. Projections for Growth

2020 was a record but strange year for sales and prices where the US market gained $2.5 trillion in value and grew $274 billion from new housing construction. It is now valued at $36.2 trillion.

Zillow forecasts that 2021 will be even better. And NAR too has a rosy forecast which can read below.

Homes Sales Prediction. Screenshot courtesy of Zillow.

 

 2. Optimism for 2021

Realtor® Price Expectations. 3 Month Outlook to Spring

A recent Reuter’s poll of nearly 40 housing analysts forecast the U.S. Case-Shiller house price index will rise 5.7% in 2021 and a further 4.6% in 2022, the highest forecast ever from the analysts.

The survey showed that as a group, they’re divided about the 2021 economy and housing sales.

44% believe there will be a pullback while 56% believe it’s all systems go. They believe the economic recovery and homebuyer’s desire for more living space will drive the housing market this summer.

 

“The U.S. housing market will continue to expand this year, perhaps at a little slower rate than recently as some of the pent up demand has been exhausted, but overall it should be a fairly good year,” said Sal Guatieri, a senior economist at BMO Capital Markets. — from Reuters report on poll of housing experts.

“Two factors here: exceedingly easy monetary policy and changes in tastes and preferences away from crowded cities in favor of areas with lower population density. This will likely continue for all of 2021,” said Troy Ludtka, U.S. economist at Natixis. — from Reuters report on poll of housing experts.

Screenshot courtesy of Reuters. Housing market factors Poll results.

Affordability is a huge issue since people don’t buy homes if they can’t afford the mortgage, downpayment, and price of the home. But let’s assume there are affordable homes in the cities you’re hoping to live in.

 3. Should You Buy a House This Year?

The big question a lot of homebuyers are asking right now is whether this is a wise time to buy a home?  Should you wait until the Covid 19 variant threat is finally stopped? Will mortgage rates jummp? The housing market has such high dynamic tension right now, that it could possibly snap in either direction.

 4. Is a Housing Market Crash Even Thinkable?

Anyone considering buying a home right now has to be aware of events that could lead to a housing market crash. At the very least, we’ll see a significant finanical event to weather within 5 years.

Covid 19 variants spreading amidst a lack of caution in Americans, open skies travel, stimulus delays, end of mortgage/rent moratoriums, bankruptcies, and a stock market perched at the top of the mountain gives everyone pause for thought.

There are tens of thousands of young people wanting to buy homes they really can’t afford.  Significant numbers of homeowners are already in forbearance, so banks will be less likely to hold off foreclosure should a jump in unemployment happen.

The run-up in home prices in the luxury, high-priced levels has been steep. This sector would crash first should Biden’s economic policies not work.  Previous recessions were highlighted by steep oil prices. If the US stock market were to crash, the housing market may go with it.

Few people see crashes coming, yet with prices so high amidst a weak economy dependent on Fed stimulus, while the trade deficit grows, you’ll hear many warnings online.

The uncertainty of Covid 19 variants is causing anxiety, however the trend seems to easing.  The summer sun is not far away. Globally too, the infection rate is falling and vaccinations continue. This should ease restrictions on house hunting and of course, and seeing people return to work.

Good News: Covid 19 Receding due to Vaccinations and Returning Sunny Weather

Each month, home prices grow amidst shrinking supply (except January) and many experts and buyers alike are asking how high this will go before prices either level off or collapse?  Growing construction and a lower number of pandemic-related buyers are bound to take some of the steam out of home prices during the 2nd half, however the impact of new construction really won’t be felt until 2022.

Although Covid vaccinations are happening, it’s unlikely to stem the tide of buyers seeking single detached houses for some time yet. Low mortgage rates, rising employment, and growing millennial demand will maintain prices.  The delay of the economic recovery further extends the delay of home construction yet makes Fed stimulus more likely.  The danger to the markets is the end of the moratorium on mortgage payments and rent payments. Those debts keep mounting and represent future bankruptcies.

Much of the swell in demand in the last 12 months was from a select group of buyers, not from the unfortunate unemployed the media focus on. And as international buyers return to the bidding wars in 2021, the outlook for prices is a jump of 10% or even 15% more.

Let’s look at more statistics and influences on what is driving the buying decision. Because if the reasons people are buying are really strong, then sales and prices will rise even if the economy sags. And didn’t it do that in 2020?

 4. 28 Key Factors Driving the Home Buy/Sell Decision this Spring

  1. strong economic recovery expected in 2nd half
  2. fear of missing out amidst record low housing supply
  3. millennials and even Gen Z’s forming new families and need a house
  4. homeowners have nowhere to go thus can’t sell
  5. home buyers want homes in more suburban and rural areas
  6. Americans who moved back to parents or with relatives will want their own place to live this year
  7. work from home expected to continue
  8. government will spend more stimulus money because they want to ensure the employment, stock market and housing markets don’t stagnate
  9. Fed promised to keep interest rates down
  10. supply of homes making it unlikely many will be able to buy
  11. new home construction, material and land prices rising faster
  12. foreclosures may free up some homes for sale
  13. migration: work from home still driving buyers out of the cities for more room for a home office, backyard, space to relax
  14. migration: businesses moving out of high tax states to lower-tax states
  15. inflation plus money supply plus need for housing could inflate house prices severely
  16. buyers holding high-value stock portfolio’s could sell to buy a home
  17. buyers see a house as a potential rental income property
  18. many sellers want to get out of the city they live in for something new after a horrible pandemic period
  19. real estate is a preferred asset when cash, savings, and stocks can only go down in value
  20. cities and regions will still not allow housing development (NIMBYs) thus more demand for the limited available stock of homes
  21. homes are a safe haven (those renting saw how insecure their week to week lifestyles are where they could be left with nothing later in life, and wondering whether social security will even over their bills)
  22. speculation (real estate investors including the new crowdfunding buyer who can take more risk don’t see a big downside to real estate and are willing to pump money in for houses or rental properties)
  23. as employment grows there will be more demand for homes in 2021, 2022 and for 5 years ahead
  24. states such as Texas, Florida, Arizona drawing new residents (climate, jobs, business growth, low taxes)
  25. Los Angeles, San Francisco, New York losing residents (cost of living, taxes, failing economies)
  26. global economic growth will hit 4% in 2021 (world bank report)
  27. 225,000–500,000 homeowners could face foreclosure this year
  28. homelessness in the major cities will become a negative factor driving people out of the cities and shunning buyers

 

 5. Will the Recovering Economy Add Fuel to the Price Fire?

If home prices soared during a major recession wouldn’t further gains logically follow when the economy does a 180 turn? And these economic swings guarantee that the one side of a shift will equal the opposite side. We have volatility and speculation as a new normal making the house buying decision a difficult one.

Houses for sale this year will be significantly higher, and that’s because it takes time for markets to cool. With no big negative influences in sight (other than oil and energy shortages) there might not be anything to cause sudden drops.

And a K-shaped recovery doesn’t necessarily mean the lower wage earners won’t have the financial act together by 2022. There will be a lot of pain, but the odds of it affecting the single-detached home market is low.

Overall, economic growth is expected to be strong in the 2nd half, after vaccinations have been given to more than half of vulnerable Americans. Covid 19 could disappear, only kept alive by a few vaccine refusers who are so sparsely located that the disease isn’t transmitted much.

As businesses reopen, fed by 3 trillion dollars, and as international trade and tourism resumes, Americans and foreign visitors will be spending again. This economic resurgence won’t happen in a hurry, which helps to bring confidence to conservative investors and help to allay inflation.

The CBO expected economic growth, employment consumer spending to grow strongly in Q4 2020, but it didn’t due to continued shutdowns from the Corona Virus threat.

So latent demand will be further extended into 2nd half of 2020. Of course, we’ll still see record demand from homebuyers in this coming spring buying season. That will hit its peak in June and July as usual.

Of course, over the next year, new home construction will provide more supply and mitigate higher price pressures. And multifamily construction should begin rising in 2021.

 

 6. Hottest State Housing Markets

According to our friends at Bankrate.com, here are the current rankings of each state’s housing market.

Overall Ranking State Home Price Appreciation Job Growth Cost of Living Ranking Tax Rank
1 Utah 3 2 31 8
2 Montana 2 12 29 5
3 Nebraska 12 6 22 28
4 Idaho 1 1 21 20
5 Indiana 10 10 11 9
6 Arizona 4 8 27 24
7 Washington 6 27 38 16
8 New Hampshire 9 46 43 6
9 North Carolina 17 16 12 10
10 South Dakota 45 11 24 2
11 Tennessee 19 14 5 18
12 Georgia 18 5 8 31
12 Kansas 25 18 16 35
12 Ohio 11 30 6 39
15 Alabama 28 4 10 41
16 Oregon 15 39 40 15
17 Maine 8 38 39 29
18 Missouri 36 13 3 12
19 Arkansas 32 9 2 45
20 Kentucky 26 25 7 19
21 Iowa 43 20 17 40
22 Wisconsin 31 36 20 25
23 Wyoming 42 19 32 1
24 Vermont 20 47 41 43
25 Florida 22 23 25 4
26 South Carolina 37 7 18 33
27 New Mexico 13 37 23 23
27 Virginia 35 21 30 26
29 Mississippi 30 3 1 32
30 Michigan 23 50 4 14
31 North Dakota 48 32 33 17
32 Colorado 27 26 36 21
33 Connecticut 5 28 46 47
34 Rhode Island 7 45 45 37
35 Minnesota 38 44 28 46
36 Oklahoma 40 24 9 30
36 California 16 43 50 49
38 Pennsylvania 24 40 26 27
39 Massachusetts 21 48 47 34
40 Alaska 44 34 48 3
40 Texas 39 15 14 11
42 Delaware 41 41 34 13
43 New Jersey 14 42 42 50
44 Maryland 33 22 44 44
45 West Virginia 46 29 13 22
46 Nevada 34 33 35 7
47 Illinois 47 35 19 36
47 Louisiana 50 17 15 42
49 New York 29 49 37 48
50 District of Columbia 51 31 51 46
51 Hawaii 49 51 49 38

 7. Predicting the Housing Market

Even the top housing market experts can’t predict because the variables are unknowns – often political reactions. It’s going to come down to home buyers doing their homework about the housing market in their city or state and weighing the risk of buying in 2021.

The fact so many are hesitant due to the economic insecurity, might be the saving grace in easing a bubble condition. Because if buyers are certain, they will be bidding up high. The sales and price velocity are very high.

Some housing market and economic experts are talking about this year’s potential housing market boom while others are warning about a downturn this year. In this article, we take a closer look at housing statistics, opinions, and the trends or velocity of the market, as we move deeper into 2021 and the spring housing market.

There are some strong demographic trends supporting brisk home construction, home sales, and mortgage buying. Add the pandemic work-from-home-migration trend and you have strong reasons to buy a house. There are renters who would do anything to move out of their tiny apartments to a bigger place with a walkable neighborhood.

And this is all taking place in an ultra-low mortgage rate period, with some homebuyers holding a lot of cash savings for a down payment.

With the growing vaccination rates across the country from New York to Florida to Texas to California, we could an unleashing of buyer demand and a return to work and recharging economy.

There are questions about the economic outlook. However, and the role inflation might play in pushing up home prices ridiculously high, as if they aren’t high enough now. More stock market and economic experts are chatting about inflation and it would it might do to the US economy in the 2nd half of 2021.

Some experts are warning of a stock market crash coming due to overvaluations, overbought stocks, and a general dislocation of the economy. And that outlook warns of potential mortgage failures in a market where many are falling behind on mortgage payments due to the pandemic shutdown.

As mortgagees face the end of protective moratoriums that shield them, and even if President Biden tries to protect them, we could see a large volume of bankruptcies and foreclosures.

 


 8. What’s Happened in the Housing Market in 2020?

Median Home Price:

$313,000 sold price for single detached homes

Average Mortgage Rates

Down to 2.73%, for 30 year fixed rate from Freddie Mac

Total Homes Sold

842,000 existing homes sold in 2020

Total Housing Inventory

Declined by 23% in 2020 to 1.9 months supply which is a record low

Days on Market

DOM declined by 10 days to 76 days on average


 9. Who Are US Realtors?

Just a quick diversion here to look at the professionals you may be hiring to sell your home or assist in buying a house.

REALTOR® Demographics 2021

65% percent of REALTORS® are licensed as sales agents, 22% hold broker licenses, while 15% have broker associate licenses.

64% of all REALTORS® are female , 55 years of age, who attended college and own a home.

Average experience of US REALTORS® is 9 years and have been with their current firm for only 4 years. They normally work about 36 hours per week, and earned a median gross income of $49,700 in 2019, up $8700 from 2018.

Realtors averaged about 12 transactions (sides) in 2019. Most Realtors are independent contractors with a very low number of homes to sell.

 

 10. How Realtors Market Homes

Realtors are increasingly turning to online real estate marketing strategies to market client’s homes and build demand. From bidding wars to reaching homeowners willing to sell via predictive analytics tools, the modern real estate is very different from their forebears.

Here’s some facts you need to know about Realtors® in the US:

On the other home buyers they serve tend to about 47 years of age, are 31% first time buyers who are typically 33 years old. They have a median household income of $106,700 and typically buy a home built in 1993 with 3 bedrooms and 2 bathrooms.

Homebuyers typically finance 88% of the home price and buy or sell using a Realtor, whom they would recommend to others.

Homebuyers found their home via:

⦁ Internet: 52%
⦁ Real estate agent: 29%
⦁ Yard sign/open house sign: 6%
⦁ Friend, relative, or neighbor: 5%
⦁ Home builder or their agent: 6%
⦁ Directly from sellers: 2%
⦁ Newspaper ad: 1%

The typical home seller in 2017 was 56 years of age, had a median household income of $107,100, and had lived in their home for a decade. 89% of sellers used a real estate agent to sell their home and they typically received 99% of the listing price, after the home sat on the market for 21 days.

Recent sellers typically sold their homes for 99% of the listing price, and 38% reported reducing the asking price at least once.

The typical home sold was on the market for 3 weeks. 41% of sellers found a real estate agent through a referral by friends or family, and 26% used the agent they previously worked with to buy or sell a home.

Most homebuyers shop for homes online however, and public interest in in-person open houses is43% lower than a year earlier. Realtors will be doing more real estate marketing online.

 

 11. February Housing Market Report


(please bookmark this post as it will be updated in a few days with full detailed sales numbers for January)

A quick look in the rear view mirror showed home prices rose slightly in a tough month economically.

Single Detached Home Sales

After two months of gains, existing-home sales fell in February. Total existing-home sales including single-family homes, townhomes, condominiums and co-ops, fell 6.6% to 6.22 million in February. Year over sales are still up 9.1% (5.70 million in February 2020).

The median existing-home price for all types of home rose 15.8% in February to $313,000, ($270,400 last February), That marks 108 straight months of year-over-year gains in US home prices.

Single Family Home Sales

Sales of houses fell 6.6% to a seasonally-adjusted annual rate of 5.52 million in February (down  from 5.91 million in January) yet were still up 8.0% from a year ago. The median existing single-family house price rose 16.2% to $317,100 in February, year over year.

Condo/Co-op Sales

Existing condominium and co-op sales were fell 6.7% from January to 700,000 homes in February, yet are still up 18.6% from 12 months ago. The average condo price in the US was $280,500 in February, a rise of 12.3% year over year.

First-time buyers contributed for 33% of sales in January, up from 31% in December 2020 and from 32% in January 2020. Last summer NAR reported first-time buyer’s share was 31%. The lower prices might encourage some first-time buyers to prepare to buy this spring, thus brightening the spring housing market forecast.

Regional Home Prices

In most regions, home sales dropped and price rose.  Compared to 2020 numbers, sales are brisk.

Existing-home sales in the Northeast region dropped all 11.5% to an annualized rate  770,000, yet this is still up  13.2% compared to one year ago. The median home reach $356,000, and that is up 20.5% from February 2020.

In the Midwest home sales fell 14.4% to an annualized volume of 1,310,000 in February, and yet that is still up 2.3% from one year ago. Midwest home prices averaged $231,800, and that is up 14.2% February 2020.

In the South, home sales also fell, dropping 6.1% to an annualized rate of 2,770,000 in February. That is up 9.9% from the same time last year. Homes sold for a median price of $271,200, which was up 13.6% from a year ago.

In the West, housing sales rose 4.6% from January to an annualized rate of 1,370,000 in February and that is 12.3% higher than last February. Median home prices in the West rose 20.6% to $493,300.

Screenshot courtesy of the National Realtor Association

Total Homes Sales February 2021

Screenshot courtesy of the National Realtor Association

Average Price of Homes Sold in January

Screenshot courtesy of the National Realtor Association

Housing Supply and Listings

Active Listings have fallen 38% from one year ago.

Screenshot courtesy of the National Realtor Association

New Home Listings

New Home Listings. Screenshot courtesy of Redfin

 

 13.Hottest City Housing Markets United States

City Nielson Hotness Rank NAR Hotness Rank NAR hotness rank change M/M NAR Hotness Rank Y/Y
Median List Price
Tupelo, ms 300 268 -8 -5 $245,000
Lebanon, pa 299 82 -44 13 $283,900
Battle Creek, mi 298 154 -18 -79 $156,000
Springfield, oh 297 16 1 -3 $137,000
Bismarck, nd 296 277 -5 4 $304,900
Wausau, wi 295 232 -24 -97 $189,900
Pittsfield, ma 294 227 14 52 $475,000
La Crosse-Onalaska, wi-mn 293 74 3 16 $272,500
Odessa, tx 292 269 -10 -137 $235,000
Yuba City, ca 291 13 17 2 $445,000
Johnstown, pa 290 234 -13 11 $89,500
Eureka-Arcata-Fortuna, ca 289 77 -13 -3 $449,000
The Villages, fl 288 142 14 -136 $315,000
Morgantown, wv 287 242 8 9 $279,900
Wichita falls, tx 286 66 40 -3 $140,000
Texarkana, tx-ar 285 184 -12 59 $194,900
Concord, nh 284 12 25 68 $355,000
Elizabethtown-Fort Knox, ky 283 57 -34 100 $210,000
Monroe, mi 282 46 -7 24 $230,000
Jefferson City, mo 281 54 -36 77 $178,000
Hattiesburg, ms 280 173 36 -45 $232,000
Albany, ga 279 265 -20 26 $145,000
Pottsville, pa 278 113 -14 -2 $110,000

 14. Residential Real Estate Forecast & Predictions

Home Sales Forecast

Realtor.com forecasts home sales will rise 7% in 2021.

Housing Market Forecast infographic courtesy of NAR.

Home Price Forecast

Realtor.com forecasts a price rise of 5.7% in 2021.

Home Supply Forecast

“Buyers may finally have a better selection of homes to choose from later in the year, but will face a renewed challenge of affordability as prices stay high and mortgage rates rise,” said Danielle Hale, realtor.com’s chief economist.

Screenshot courtesy of St Louis Fed

New Home Sales


According to a new report in Yahoo Finance,  new housing construction fell more than expected in January.  There is a surge in future construction permits, yet December’s and January’s construction lull could contribute to higher home prices in 2021.  Low mortgage rates, millennial housing demand, and a surging economy will push spring housing  home prices up.

New home construction starts decreased 6.0% to a new annual rate of 1.580 million units last month.  This drop is much more than economists had forecast (1.658 million units in January). Homebuilding overall fell 2.3% compared to January of 2020.

New Home Construction

An estimated 1,390,300 housing units were started in 2020. Privately-owned housing starts in December rose 5.8% to 1,669,000. This is 5.2 more than December of 2019. Building permits issued in December rose 4.5% in December to 1,709,000. That was 17.3 % higher than December 1,457,000 housing permits issued.

New Residential Construction. Screenshot courtesy of census.gov

 

Single Family Home Construction

Single-family homebuilding declined 12.2% to a seasonally adjusted annual rate of 1.162 million units after eight straight months of gains. Single-family building permits jumped 3.8% to a rate of 1.269 million units in January.

Multifamily home construction surged  (up 17.1%) to a 418,000 units in January. Building permits for multi-family housing projects soared 27.2% to a pace of 612,000 units.

“Demand conditions remain solid due to demographics, low mortgage rates and the suburban shift to lower cost markets, but we expect to see some cooling in growth rates for residential construction in 2021 due to cost factors, supply chain issues and regulatory risks,” said NAHB Chief Economist Robert Dietz. “Some builders are at capacity and may not be able to expand production due to these headwinds.” from Nahbnow.com February report on homebuilder confidence.

Homebuilder sentiment (HMI index) is up to 90, but the 6 month outlook has it sinking toward 80.

Screenshot courtesy of NAR

Chicago-based building products company AZEK has seen amazing sales growth in its residential business, which accounted for about 87% of total revenues. The company reported $212.3 million of sales, up from $166 million last year. Azek reported $10 million in earnings for the quarter and its stock price has risen 23% so far this year.

“The focus on the house really gives us a long-term benefit because we really benefit from people investing in their homes said CEO Jesse Singh who is bullish on the long-term outlook (interview with Jim Cramer of Madmoney).

 15. Housing Affordability

What is hampering housing affordability is competition and rocketing prices, housing development regulations, lack of developable land, lack of builder subsidies, stagnant wages and high unemployment, and rising building materials and labor costs. Government regulation and NIMBYism are overpowering the market’s opportunity to create more housing hence we can expect higher home prices.

Rising inflation and interest rates could be the key factor affecting housing affordability in the next 3 years.

 16. Mortgage Rates

The rate for a 30 year fixed rate mortgage has reach an amazing low of 2.7 to 2.8% of recent according to this chart below courtesy of NerdWallet and Zillow. NAR expects the 30-year fixed rate mortgage to average 3% in 2021 as the economy improves and investors look for higher returns than the 10-year T-note yield. Mortgage applications rose 7% in February.

Screenshot courtesy of Nerdwallet.

30 Year Fixed Rate Mortgage Rate

Screenshot courtesy of St Louis Fed

 

Screenshot courtesy of Bankrate.com

 

 17. Mortgage Payments

According to the February NAR report, the monthly mortgage payment on a typical existing single-family home rose to $1,040 (1126 in February which is still lower than the average rent price of $1166 per month.

On average, families typically spent 14.8% of their income on mortgage payments based on a median family income of $84,313 in the 4th quarter 2020. That’s down .1% from last year. The family income needed to by a house is now $49,908 (up $1000 from last year).

 18. Mortgage Forbearance, Delinquency and Foreclosure Report

Black Knight reported that almost 3.6 million 90-day defaults occurred in 2020 – the largest number since 2009. 2.1 million homeowners are currently seriously delinquent on their mortgage payments, and with 600,000 forbearance plans expiring in March, it will create 1.5 million more serious delinquencies than at the start of the pandemic. As of last month, there were above 2.7 million homeowners in active forbearance plans. 12% of borrowers are now in forbearance.

 

Home Foreclosures

The good news is that home foreclosures hit an all-time low in January. ATTOM Data Solutions January 2021 U.S. Foreclosure Market Report showed a total of 9,702 U.S. properties had foreclosure filings — default notices, scheduled auctions or bank repossessions. It is 11% down from a month ago and down 80% from 12 months ago.

The bad news is that this is due to President Biden’s foreclosure moratorium on repossessions of homes on government-backed mortgages. the fear is that when it ends in March, there will be little to prevent foreclosures.

Home Repossessions

The World Property Journal reports that US lenders repossessed 1,428 U.S. properties in January 2021, which was 28% lower than December 2020. It was also 86% less than last year.

Those states with an annual decrease in REOs in January 2021 included: Illinois (-86%); Florida (-83%); Maryland (-83%); California (-82%); and Texas (-82%).

 19. The US Economy

There are plenty of varying forecasts and predictions for the 2021 US economy. Most outlooks are optimistic after a disastrous 2020.

The Conference Board has this to say about the US economic forecast:

The Conference Board forecasts that US Real GDP growth will rise by 2.0 percent (annualized rate) in 1Q21 and 4.4 percent (year-over-year) in 2021.* Following a lull in the economic recovery in recent months, we expect the pace of the rebound to reaccelerate as new COVID-19 infection rates decline, the vaccination program expands, and the prospects of another large fiscal support program improve. We expect the recovery to continue into next year and forecast growth of 3.1 percent (year-over-year) in 2022.

BEA reported that the U.S. international trade deficit increased in 2020 from $576.9 billion in 2019 to $678.7 billion in 2020 As a percentage of U.S. gross domestic product, the goods and services deficit rose .5% from 2.7% 2019 to 3.2 percent in 2020. The goods deficit increased from $864.3 billion in 2019 to $915.8 billion in 2020. The services surplus decreased from $287.5 billion in 2019 to $237.1 billion in 2020.

BEA reports that Real GDP fell 3.5% in 2020 vs 2019. It had increased 2.2 percent in 2019. Real (GDP) grew 4.0 percent in the fourth quarter of 2020 according to the “advance” estimate released by the Bureau of Economic Analysis. 3rd quarter of 2020 had a rebounding 33.4 growth, in comparison with the Q2 shutdown period.

Screenshot courtesy of Statista

 

The Fed believes more harm would result with low inflation rather than higher inflation. The expected inflation rate for 2021 is 2.2%.

Screenshot courtesy of knoema.com.

 20. Realtor Housing Recovery Index

The realtor recovery index grew strongly beginning in May, but as the reality of the fight with Covid 19 has worn on, confidence in the recovery has waned. Those lofty expectations were perhaps a little rosy but as summer 2021 approaches it will rise again.

For the week ending February 6, 2021, the realtor.com Housing Market Recovery Index reached 101.5 nationwide, down 2.7 points over last week. The New Supply Growth Index declined by 7.9 points from the prior week which means home sellers are pulling back. That means how sellers perceive their own future affects whether they will list.

As the economy lifts, and prices rise, we’ll see many more homes come on the market, which should help to moderate price increases. The housing demand component decreased slightly to 118.7 this past week, down 2.2 points over last week.

The pace of sales held well above the pre-COVID baseline at 110.0, and was .3 points higher than the previous week. 31 of the 50 largest markets had growth in asking prices.

Screenshot Courtesy of NAR

 

Screenshot courtesy of NAR

 21. Which Housing Markets Will Do Best in 2021?

NAR believes these 10 housing markets will enjoy the best sales and price growth this year.

Below, Kiplinger reports stats from Attom Data Solutions on cities with the highest price changes in the past year.

Metro Area Median Home Price % Change
1 Year
% Change since home price peaked in 2012
Oxnard, Calif. $650,000.00 17.60% 8.9%
New Haven, Conn. $235,150.00 17.10 -13.9
Rochester, N.Y. $153,000.00 16.90 44.4
Buffalo, N.Y. $160,000.00 16.50 85.2
San Jose, Calif. $1,160,000.00 16.20 58.2
Hartford, Conn. $237,500.00 15.20 -0.7
Modesto, Calif. $345,000.00 14.70 -2.2
Ogden, Utah $289,500.00 14.50 92.7
Greensboro, N.C. $160,000.00 14.20 26.5
Columbus, Ohio $219,000.00 13.80 38.7
Lansing-East. Lansing, Mich. $138,000.00 13.70 1.7
Bridgeport, Conn. $460,000.00 13.50 -9.7
Riverside-San Bernardino, CA $393,000.00 13.40 -3.1
Stockton, Calif. $400,000.00 13.20 -0.8
Seattle, Wash. $525,000.00 12.80 47.5
Cleveland, Ohio $146,000.00 12.70 2.5
Fresno, Calif. $299,000.00 12.70 -5.8
Harrisburg, Pa. $175,000.00 12.70 16
Memphis, Tenn. $156,400.00 12.70 11.9
Bakersfield, Calif. $245,000.00 12.40 -11.6
Milwaukee, Wis. $228,417.00 12.40 0.5
Worcester, Mass. $260,000.00 12.30 18.1
Detroit, Mich. $181,815.00 12.10 7
Winston-Salem, N.C. $165,000.00 12.10 22.7
Phoenix, Ariz. $308,900.00 11.90 4.1
Albany, N.Y. $215,000.00 11.70 17.5
Grand Rapids, Mich. $210,000.00 11.70 50
Albuquerque, N.M. $180,000.00 11.60 11.5
San Diego, Calif. $620,000.00 11.50 22.3
Tucson, Ariz. $229,000.00 11.50 -1
Indianapolis, Ind. $185,000.00 11.40 28.2
Colorado Springs, Colo. $345,000.00 11.20 57.7

 

All markets, including Los Angeles, San Diego, Denver, New York, Manhattan, Dallas, Boston, Philadelphia, Atlanta, Chicago, Austin, San Antonio, Salt Lake City, Tampa and Miami, have felt the crush of demand and much higher home prices. Florida is booming while California’s housing market is hurting.

 

Whether it’s a good time to buy a home might depend on who you are and why you’re buying. For renters stuck with high rents and zero equity going forward, anytime is a good time. Overall, the HPSI is rising again a grim economic performance in December. Buyers sentiment is down significantly from just one year ago. As the pandemic eases, we could see the index rise slowly back to previous levels around 90.

HPSI Index Sentiment. Screenshot Courtesy of Fannie Mae.

 22. Will the Housing Boom Continue?

If the economy recovers, we know demand for homes and condos will improve too. There are strong fundamental drivers of housing demand as noted earlier, and even high bubble-like prices might not deter home buyers in 2021 and 2022.

“Home sales could possibly reach 8 million if we had more inventory,” said Lawrence Yun, chief economist for the Realtors. “Mortgage rates should remain very low throughout 2021, although we may have seen the lowest already.”

It’s unlikely we’ll experience a housing market crash in the next two years, but we can’t completely discount one. More likely is the Biden admin won’t medal with something so fragile while the economy is rebounding.

Sources, Citations & References and further reading:

 

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Housing Market Forecast: Looking for specific data related to the Dallas housing market, San Antonio, Austin, Salt Lake City, Los Angeles real estate market, New York real estate market forecast, Atlanta real estate marketSeattle real estate forecast, Chicago home sales projections, Philadelphia home sales report, San Diego County real estate update, Miami condo market, Boston housing market, Bay Area housing forecast, Tampa Sarasota housing outlookDenver housing outlook, and Houston housing market predictions? See forecasts for California housing, and Florida housing market.

More from the housing stock market blog: Real Estate MarketCalifornia Housing Market 2021 | Stock Market Crash | 5 Year Housing Market Outlook | Home Prices | Buy House | Spring Housing Market | Florida Housing Market 2021 | New York Real Estate 2021 | Housing Stocks to buy in 2021 | Denver Housing MarketCities with Lowest House Prices | Housing Market Recovery 2021 | Manhattan Real Estate Forecast | China Economic Forecast 2021 | Stock Market Forecast 2021 | Will the Housing Market Crash next year?3 Month Forecast6 Month Forecast | Will the Stock Markets Crash? | Denver Housing Market | Chicago Housing Market | Miami Real Estate | Atlanta Housing Market | Tampa Housing Market 2021 | Dallas Real Estate |   Toronto Housing Market | Mortgage Rates Low | Mortgage Refinance Rates | Homes for Sale

Many Americans will soon be on their own without Fed assistance and facing back rent and overdue mortgages. Cities such as Denver, Dallas, Houston, San Antonio, Austin, Salt Lake City, Las Vegas, Tulsa, Seattle, Boston, New York, New Jersey, Chicago , San Antonio, Austin, Colorado Springs, Salt Lake City, and Los Angeles may see some new home listings out of this distressed homeowner market, but not as much as some forecasters are predicting.

Aside from forecasts and predictions as well as real estate marketing assistance for companies in California, Utah, Texas, Massachusetts, and Florida including the cities of including Los Angeles, New York City, San Diego, San Francisco, Houston, Miami, Phoenix, Denver, Seattle, Chicago, Atlanta, Boston, Tampa, Charlotte, and Orlando. Other major cities include Anaheim, San Antonio, Detroit, Cincinnati, Beverly Hills, Malibu, San Jose, Fresno, Santa Clara, Reno, Sacramento, New Haven, Palo Alto, Portland, Washington, Irvine, Nashville, and Sunnyvale.  And looking forward to helping you in Salt Lake City, Riverside, Rancho Cucamonga, Oakland, Arlington, El Paso, Costa Mesa, Raleigh, Tampa, Jacksonville, St Petes, Oklahoma City, Denver, Colorado Springs, Albuquerque, Tacoma, Glendale, Oceanside, Long Beach, Huntington Beach, Carlsbad, Santa Clarita, Henderson, Las Vegas, New Orleans, and more.

 

 

Housing Market Forecast 2021 – copyright Gord Collins

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