Real estate and financial experts along with mortgage lenders all agree the 2021 housing market is holding strong not just in the Upstate but all across the nation. And they see no indication this won’t continue throughout the year. In fact, according to the National Association of Home Builders/Wells Fargo Housing Market Index (NAHB/HMI) construction of single family residences reached an all time high in November, 2020 and while there was a slight drop in December, 2020, it was not enough of a concern to damper enthusiasm.
For 2020 a robust sellers market led to reduced housing inventories. In December the number of listed homes available for sale dropped to a record low of under 700,000. This coupled with historically low interest rates led to steadily increasing home prices, especially single family homes in the mid-level price range, making new home construction an attractive option.
It is expected sales of both new construction and pre-built homes will remain steady in the coming year though Realtor.com chief economist Danielle Hale has noted, “The 2021 housing market will be much more ‘normal’ than the wild swings we saw in 2020. Buyers may finally have a better of selection of homes to choose from later in the year but will face a renewed challenge of affordability as prices stay high and mortgage rates rise.” While Redfin chief economist Daryl Fairweather commented, “In 2021, the landscape for home builders will be even more favorable. Rising prices for existing homes will drive more buyers to consider new-built homes.”
Rising prices in single family home construction due to supply side concerns including limited buildable lots, supply-chain slowdowns, rising lumber costs and a skilled labor shortage, could translate into a lag time in construction completion. Though remodeling of existing homes is expected to remain strong as homeowners continue to take advantage of attractive refinancing and home equity rates.
Even as the effects of the pandemic begin to lessen, the global economy will remain sluggish though Fairweather expects to see a slight increase in mortgage rates. Fairweather said, “…home buyers will remain undeterred by its effects…as businesses reopen and daily activities become safe, a new batch of homebuyers and sellers will enter the housing market, making for the strongest year of home sales since 2006.” Many economists believe residential construction will be the bulwark of the recovering economy as indicated by a positive labor market increase. Over 15,000 jobs were added in November, 2020 alone and home construction is one of the few sectors showing job gains over the previous year.
New construction or a pre-existing home, let Carolina RES put your mind at ease whether buying or selling. For information on our list of services please connect with us online or by calling 864-242-1099.
