Housing Market Forecast Summer 2021

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Real Estate

In summer 2021 we expect to see some changes, but continued low inventory and renter affordability issues are likely to persist through the summer months.

According to U.S. News, the first months of the year have seen rapid growth in home prices as low inventory of houses on the market combined with high buyer demand creates fierce competition in suburban areas and medium-to-small metro areas across the country.

Looking forward to late spring and summer, the fast rollout of COVID-19 vaccines is making many hopeful that an end to the pandemic is in sight. But some housing market trends caused by the pandemic are expected to continue.

The housing market continues to be sizzling hot as we kick off summer, resulting in quick-selling homes and higher home prices. The only factor of concern is the housing supply which continues to fall short of demand. Increasing the supply of homes for sale would certainly help bring balance to this strong seller’s market, but the most recent housing market trends don't suggest that inventory is likely to improve soon.

According to the latest data released by the National Association of Realtors, existing-home sales declined for the third straight month in April. This decline is the result of the low inventory and swiftly rising prices. The supply of homes for sale at the end of April was down 20.5% from one year ago. There were 1.16 million homes for sale, representing a 2.4-month supply at the current sales pace.

“Despite the decline, housing demand is still strong compared to one year ago, evidenced by home sales from this January to April, which are up 20% compared to 2020,”  said Lawrence Yun, NAR's chief economist. All but one of the four major U.S. regions witnessed month-over-month drops in home sales, but each registered double-digit year-over-year gains for April. 

Here are a few trends shaping up for the summer 2021 housing market:

·      Buyers will still be focused in the suburbs, but interest in city living will regain popularity.

·      New construction homes will continue to come on the market, but the housing supply will remain slim.

·      Interest rates may increase slightly but are expected to remain relatively low.

·      Home inventory will also increase, but it will stay a seller’s market.