After a remarkably hot summer, home sales are expected to peak this fall then taper off in 2021 while staying above pre-pandemic levels, according to a forecast by Zillow's team of economists in this week's Market Report1
. Key market stats from the week ending Sept. 19 show depleted inventory levels plumbing new depths and prices skyrocketing over 2019 figures.
FORECAST: Housing market outlook improves, with major unknowns tempering expectations
- Sales expected to stay high but taper down through 2021
Zillow's team of economists expect seasonally adjusted home sales to peak this fall then gradually decline through 2021. Sales volumes overall are forecasted to remain higher than pre-pandemic levels throughout this year and next.
- Home price outlook adjusted higher for coming year
Seasonally adjusted home prices are expected to increase 1.2% from August to November and rise 4.8% between August 2020 and August 2021. Zillow Research's previous forecast predicted a 3.8% increase in home prices over this time frame.
Zillow's predictions for seasonally adjusted home prices and pending sales are more optimistic than previous forecasts because sales and prices have stayed strong through the summer months amid increasingly short inventory and high demand. The pandemic also pushed the buying season further back in the year, adding to recent sales. Future sources of uncertainty including lapsed fiscal relief, the long-term fate of policies supporting the rental and mortgage market, and virus-specific factors, were incorporated into this outlook.