With mortgage rates and house prices on the rise, many professionals throughout the industry are wondering what to expect once the pandemic subsides. A report from Redfin predicted five possible ways that the housing market will change after the pandemic is over.
Recently, home prices have been growing at a rapid pace and according to the report, they will continue to grow but at a slower pace as mortgage rates eventually temper demand.
"Some people will be eager to buy a home because they will feel more confident in their own economic prospects once the economy recovers. But some people will look at how expensive homes have become and hold off. As a result, home values will rise about 5% per year, which will be more in line with the growth of the overall economy," according to the report."As the economy recovers, mortgage rates will likely increase to pre-pandemic levels of around 3.5% for a 30-year fixed-rate mortgage, making borrowing to buy a home more expensive than it is now."
Additionally, Redfin predicts that more folks will be listing their homes for sale in order to cash in on high home prices following the COVID-19 pandemic. With widespread vaccine rollouts, those who were reluctant to sell due to the possible risk of COVID-19 exposure will be more likely to do so once vaccinated. The report also predicts that as forbearance plans expire, folks will want to sell their homes to help pay off missed mortgage payments. The only homeowners that won't be looking to sell are those who were able to secure a mortgage rate below 3% during the pandemic.
Meanwhile, Redfin also predicts that the condo market will heat up, suburbs will start to feel more like cities and rents will rise quickly.
Click here to read the full Redfin report.
