As we venture into 2021, there is much hope for the Pandemic to subside as the vaccination begins to roll out. It directly affects all of us, including real estate, and many are wondering what is instore for Real Estate in 2021. Will it be a continuation of 2020, or will we see some changes?
The National Association of Realtors surveyed 23 economic and housing market experts and other key US bureaus and compiled their responses for the 2020 Real Estate Forecast Summit last month. They forecasted key economic factors they believe will affect Real Estate in 2021 and 2022.
They predict the GDP (Gross Domestic Product) to increase by 3.5% in 2021 and 3% in 2022, whereas it was down 2.7% in 2022. Unemployment from 6.9% in 2020 to 6.2% in 2021 and 5% in 2022. The inflation rate 1.2% in 2020 to 1.7%in 2021 and 2% in 2022.
Housing Price change Year over Year was 15.5% in 2020. They predict 8% in 2021 and 5.5% in 2022. Freddie Mac reported the 30-year fixed mortgage rate at 2.83% in 2020. These experts predict 3% in 2021 and 3.25 in 2022. Housing Starts for New Construction was at 1.53 million in 2020, and they anticipate 1.5 million in 2021 and 1.59 million in 2022.
Because of the Pandemic, many were forced or chose to work at home. They estimate 21% worked at home in 2020, and they believe it will drop to 18% in 2021 and 12% in 2022. It is important to watch here in the Valley as more towns connect to high-speed internet, allowing people to work remotely.
Wishing you all the best in 2021. Happy NEW Year!