Home sales are expected to rise by around 10% in 2021
Mortgage rates will continue to be great
Home prices will rise, but more moderate increases
Very low mortgage rates have been a big reason for the housing market’s strong performance in 2020 and should continue in 2021.
Renters who would like to move into homeownership are facing higher home prices. Even with record low mortgage rates, this is making harder for the first time home buyers to make a purchase.
President-elect Joe Biden has proposed a $15,000 first-time home buyer tax credit, which would be available at the closing table. In essence, it is down payment assistance. Some negotiation with Congress is needed to make it into a law, and surely there will be qualifying income limitations to ensure the benefit goes to those who need it most. This is certainly welcome news for many renters.
Under a Biden presidency, government spending is likely to rise. Spending on programs such as high-speed internet access for rural communities and improved rail transportation to distant suburbs will have a positive impact on housing. Land is plentiful and relatively cheap, making it easier for homebuilders to construct homes.