As we move into 2021, the housing market continues to be hot with home values soaring. According to the National Association of Realtors, existing home sales rose to an all-time high in December 2020, and the median home price rose to a record high of $309,800.
The demand for homes is being driven by historically low mortgage rates, which have been hovering around 3% since the start of the pandemic. This has made it easier for buyers to purchase homes and has encouraged them to take advantage of the low rates.
Additionally, the pandemic has caused more people to move out of crowded cities and into the suburbs, which has increased demand in suburban areas. This has caused home values to rise in these areas, as buyers compete for limited housing inventory.
The hot housing market has also been fueled by an influx of investors looking to capitalize on the low mortgage rates and rising home values. Investors are buying homes and renting them out, or flipping them for a profit. This has caused home values to continue to rise as investors outbid traditional buyers.
The good news is that the hot housing market is expected to remain strong in 2021. This is due to the continued low mortgage rates, as well as the increased demand for suburban housing.
However, it is important to remember that the hot housing market can come with some risks. As home values continue to rise, buyers may be tempted to overspend, which could lead to financial difficulties if the market takes a downturn. Additionally, investors may be taking on more risk than they can handle, as they may not be able to cover their costs if the market turns.
Overall, the hot housing market is expected to remain strong in 2021. Home values are expected to continue to rise, as buyers and investors compete for limited housing inventory. However, it is important to remember that the market can be unpredictable, so buyers and investors should be sure to take the necessary precautions to protect themselves.