Usually, springtime is optimal for new home buyers not having to break the bank. However, since the pandemic resulted in national stay-at-home and distancing orders, home prices have been at a record high, seeing an average increase of approximately 19.1%. Meanwhile, inventory is at a historical low.
A lot of homebuyers are wondering when this is going to end. Experts themselves have pondered what the future of 2021 will have in store for us: Will the market experience a boom or a crash?
Here’s what the experts are saying.
Why Are Housing Prices High?
First, to gauge a proper prediction of what will happen in the future of houses, it’s essential to understand how the housing market’s current state came to be.
Well, despite predictions of a potential recession of the market due to temporarily being placed on hold as a result of COVID, the housing market is currently highly active, and business is booming.
As mask and social-distancing mandates are lifted, and life is returning to normal, thousands of buyers are hopping right back into the game, resulting in a boom in the market. However, the high amounts of home demands are expected to quickly exceed the number of available houses, contributing to a consistent increase in prices.
An improvement in the economy, as is currently happening, is also a common contributing factor to increased prices.
Luckily, however, these prices aren’t entirely unmanageable, and a large number of new home buyers are still able to afford a home.
When Will Prices Return to Normal?
The cause for concern is that the demand is always a step ahead of the inventory. Increasing the number of houses available on the market would make everything more balanced.
However, the recent trends in purchases make it seem as though it will be some time before the price goes back down. Surprisingly, while mortgage rates are expected to stay low, house prices are expected to stay high for the foreseeable future.
While it’s highly unlikely that the costs will decrease, the speed at which the prices are rising could potentially slow down.
Considering Buying a New Home?
Even in a time with limited supplies and a highly competitive market, we can help new home buyers get all set up with a mortgage.
Consider taking advantage of our team of experts at Mortgage Solutions Financial. We can help you with every step of the application process. Call today to get in touch.