Housing market on track for quick recovery in 2021
When the housing market crashed in 2008, the road to recovery was a long and gradual one. But while the market’s current downturn looks to be the worst since then – with home sales predicted to suffer the biggest year-over-year decline in 12 years – expectations for its recovery are far more optimistic.
In fact, according to one recent analysis from Nationwide, home sales could be back to 2019 levels as soon as next year.
Of course, the speed at which the market rebounds will largely depend on the coronavirus’ spread and available treatments. But real-estate market fundamentals were strong at the beginning of the year and a combination of low mortgage rates, favorable demographics, and solid household formations should help fuel a quick recovery.
David W. Berson, Nationwide’s senior vice president and chief economist, says current data is already showing signs of a rebound.
“New home sales unexpectedly increased for April, suggesting some consumers continued to shop while on lockdown,” Berson said. “Record-low mortgage rates have also helped to buoy the housing market, and mortgage applications for purchase have surged since bottoming out in early April.”
If those trends continue, the market should quickly gain strength and be well positioned for a turnaround.
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