Housing + Relocation Outlook 2021
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The Coronavirus has made many impacts on the housing market in 2020, but how will these changes correlate to the trends of 2021? Changing sentiments on the impacts of relocations, housing market predictions, and where people are moving are all factors in the 2021 market.
According to a 2020 study from IMPACT Group, there are many reasons that relocations are slowing. For “dual-career” couples and families, relocations are becoming increasingly challenging. Many fear that their partner will be unable to find a job in the new location during a down economy.
With remote work becoming increasingly popular, relocations are not needed for those positions, impacting corporate relocation and recruiting relocation needs. Trends suggest that a relocation during a pandemic may lead to an increase in loneliness because there are fewer opportunities for socialization and networking at a new job or in a new city.
Housing Market Predictions
The Home Buying Institute predicts that home prices will continue to rise in the new year and mortgage rates will be around 3%. Inventory of homes for sale will remain low. They recommend that homebuyers allow for extra time when house hunting as the competition between buyers will remain high. The record-low mortgage rates will also make 2021 a great year to refinance existing home loans.
Experts recently noted that as mortgage relief options created to accommodate the pandemic run out, there is likely to be a surge of foreclosures. The timing of these will vary based on state but will bring more affordable options to the housing market. New construction homes are also expected to continue rising.
Where are people moving?
As work from home trends continue, people are moving out of big cities and out to suburbs and small communities. Based on the United States Postal Service change of address data, 15.9 million people have moved during the coronavirus. This is an increase of 3.92% from the same time last year. Temporary change of address requests increased by 27% from the previous year.
According to Forbes, there is no evidence that the amount of people moving out of big cities is enough to ruin the fate of these cities. As rental prices fall, a new demand will bring more people. As some people do move to smaller towns and communities, this may boost those economies even amidst the Coronavirus pandemic. These small and medium-size cities offer more space, a lower cost of living, and more opportunities.