By VICKI BROWN
vbrown@lowcountry.com
With the COVID-19 pandemic still ongoing and impacting our economy, it now a good time to buy a house or sell a house?
According to analysts, yes, they expect the housing market to remain strong in the coming year.
“Despite the uncertainties of the pandemic, the housing market performed well in the second half of 2020,” says Sam Khater, Freddie Mac’s chief economist. Khater released his statement on the housing market to multiple media outlets last week.
“Low mortgage rates and the ability to work remotely continued to propel demand for housing, which is reflected in home sales reaching levels not seen in 15 years,” he said.
Todd Land, of Coldwell Banker, in Walterboro, said he agrees with this assessment.
“Interest rates are low, and unfortunately, so is our inventory. This is definitely a sellers’ market, and the market is strong,” said Land.
When reviewing the local real estate market in Colleton County, local realtor Rilee Westbury, of Colleton Realty, said she has the same issues right now with inventory. “The market is hot. We need inventory because we have out of state and out of county buyers looking for housing and it is hard to find,” she said. “We are actually having 24-hour contracts and multiple offers on homes, a situation we haven’t had in many years,” she said.
According to officials and economists, the situation is unlikely to change. Here a several predictions for the year:
Interest rates are likely to remain low.
The average 30-year fixed-rate mortgage hit a record low more than a dozen times in 2020. The low interest rate environment is projected to continue through 2021, with the 30-year rate expected to average below 3 percent. Low rates are good news for buyers looking to purchase a home, and homeowners looking to reduce their mortgage payment through refinancing.
Home sales to remain high.
The demand for housing is expected to remain strong in 2021, creating a favorable market for sellers. Last year, low mortgage rates and the ability to work remotely drove up home sales. This year, home sales are expected to ride that wave, averaging 6.5 million for the year.
House prices to grow moderately.
In the second half of 2020, the high volume of home sales and low supply of housing drove up house prices. In 2021, house price growth is expected to moderate for the full year.
Refinances to start declining.
Low mortgage rates spurred refinance activity in 2020, boosting mortgage originations (the process in which borrowers apply for a home loan) to historic highs. As mortgage rates rise modestly in 2021, refinance activity should start to slow.
“While many homeowners took advantage of these low rates in last year, evidence suggests that many lower income homeowners still have the opportunity to strengthen their financial position by refinancing,” Khater stated, in a press release.
For more insights on housing, go to freddiemac.com/research. For homebuying and homeownership resources, go to My Home by Freddie Mac.
