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A new Redfin report predicts there will be $2.53 trillion worth of home sales in 2021 -- roughly equal to the value of Amazon.com Inc. and Facebook Inc. combined, or France’s 2020 gross domestic product. The meteoric rise of demand, caused by low mortgage rates and the wave of migration due to remote work, is forecasted to bring a 17% year-over-year gain in 2021.
Almost two-thirds or 60% of people expect to continue working from home at least part-time after the pandemic, according to an April survey of Redfin.com visitors who moved to a different metro area in the past year. Such high demand amid a housing shortage is what caused March to be the hottest month in housing history, with home values, price growth and selling speed all reaching new heights.
According to Redfin chief economist Daryl Fairweather, if mortgage rates rise and the price of homes slows down, it could lead to a balanced market. More people could then afford to purchase homes and the volume of sales would increase.
“We expect 2021 to be an even more active year for the housing market than 2020 because homebuyers have a better sense of what the future looks like. Employers are providing clarity on permanent remote-work policies, the economy is recovering and mortgage rates remain low. All of these factors mean that we'll likely see even more buyers enter the market this year and in 2022," said Fairweather.
The southern US is expected to come in first with $1.09 trillion in home sales, followed by the West with $696.3 billion, the Midwest with $422.6 billion and the Northeast with $322.8 billion.
Fairweather stated that the South usually holds the top spot in home sales, because it has more vacant land on which to build and attracts homebuyers who look for affordability and space.
"A lot of wealth from the coasts is shifting South. Affluent homebuyers from New York and San Francisco have moved to places like Florida and Texas during the pandemic, which has fueled home sales and driven up prices in those areas," Fairweather added.
Click here to read more from the report.