2020 was a challenging year for everyone. The coronavirus did not leave any industry unscathed. The pandemic pulled the country into recession and caused millions to lose their jobs. But the housing market remained steady. Some sectors even claimed the industry boomed.
The world is still in the grip of a pandemic, but there’s a more hopeful feeling now. It’s because vaccines are available now. Realtors and homeowners are still, however, wondering how COVID vaccinations impact the housing market.
COVID 19 caught the whole world unprepared. Countries scrambled to control the virus while keeping people safe. The lockdown that followed saw people stuck at home while companies and stores shut down. People deferred their mortgage payments. The government also suspended rent as people struggled with their reduced income.
The housing market didn’t remain at a standstill, though. People preyed on the low mortgage rates to buy a home. The National Association of Realtors claimed there was a 24.7 percent increase in sales. These were for previously-owned houses.
There was also an exodus towards the suburbs and rural areas. Many Americans moved away from the cities in search of more space. It was reportedly easier to prequalify for a home loan too.
Vaccinations for the virus began in December of 2020. As the number of people getting vaccinated increases, the interest in the housing market increases too. It will take a year or more for the country to go back to normal.
Real estate experts have a positive outlook. They are hopeful about how COVID vaccinations impact the housing market. Here’s what they say will happen:
A surprising effect of the lockdown was that people started to leave cities for the suburbs. There were also a fair few who ventured farther into the rural areas. This move could be due to the rise of remote working during the pandemic. Parents worked from home, and children always had to stay indoors. It soon became clear that families need more space. This was something that houses in the suburbs could provide.
Millions of Americans are now vaccinated. So realtors believe that more people will be returning to the cities. The return is primarily because of the lack of services people get in rural areas. Rent in some cities has also gone down because of the pandemic, and people will take advantage of that.
A large number of homeowners will still live in the suburbs. This is the belief of economist Lawrence Yun of the National Association of Realtors. Cities continue to provide a certain appeal. Younger people will especially want to return to cities after months of lockdown. But many homeowners’ priorities will have changed. People will realize that life is more affordable outside of city centers.
A lot of small businesses will also continue with the telecommuting model. It’s why home offices will remain in demand.
The housing market was quite robust during the pandemic. Now more people will be searching for a “mortgage loan near me.” This will be due to the vaccine roll-outs and interest rates at all-time lows. Zillow has even predicted there will be seven million homes sold this year. That’s almost 25 percent more than 2020’s numbers
The seller’s side isn’t doing too bad either. Around 92% of the market is better for those selling their property. It’s because there are more buyers than sellers at the moment. But that could soon change. Forecasters are saying more properties are up for sale. It will even go up as President Biden delivers on his projected vaccination numbers.
A lot of homeowners delayed listing their property before. This resulted in the lowest housing inventories in the US for years. Now builders and developers are aiming to construct a million residences. Their goal is to help bolster the demand.
The housing industry has remained resilient during the pandemic. But landlords were not among the fortunate ones who found relief. Things might even get worse now that the rent and eviction moratorium will lapse on June 30.
It’s doubtful that all tenants will be able to pay their arrears. So apartment owners will have to look for other means to cover their losses. One way to do this is to increase the rent going forward.
Realtors are worrying over one issue — how COVID will affect mortgage rates. The pandemic looks under control, but people are wondering if the federal government will stick to the low interest rates. They said it will continue throughout 2021 and well into 2022.
Some experts say you don’t want to take too long thinking about how to purchase a home. Once the majority gets vaccinated the economy will start moving again. You can expect mortgages to go up regardless of what the government promised. So strike as early as you can. Even a one percent increase might look measly on paper, but it translates to tens of thousands in the long run.
Did you find the post informative? Great! Then you’ll also like reading this article on how to qualify for a mortgage when you’re self-employed.
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