In 2020, most employees doing remote work or work from home had surprisingly resulted in massive upscaling of the housing market in 2021. The housing market has evinced a substantial soar that it hasn’t evidenced in 15 years, and many houses have been sold. The National Association of REALTORS Report (NAR) revealed that the annual growth rate was 5.6 percent in 2020, where first-time buyers were 33 percent, 52%of buyers are in the age group of 30- 39 years, 88% percent of buyers millennials, and 23% of buyers are in the age group of 40-54 years”. The same demand continued in 2021 too, but low inventory and increased house prices have disappointed in a big way. Adding to it, the COVID second wave blow was harsh on people’s lives and the housing market, too, the result of which from March 2021, there was a downfall of the housing market. The realtor.com research states that in March-2021, the prices increased by 15.6 percent compared to march-202 and in larger metropolitan price rise is estimated to be 12.1 percent compared to the last year. Some markets even noticed price rise by triple times.
Even though the household finances send a positive note, the buyers’ cognizance of buying situations continues to disappoint as increased prices and low inventory Issues persevere. The considerable rise in the Home Purchase Sentiment Index is observed in March 2021, which projects a sense of consumer hopefulness for the upsurge of the housing market and economic situation as COVID vaccination is being carried at a larger scale which is expected to boost the confidence in the market to carry on with its pre-COVID situation. The COVID vaccination drive not only secured people from the pandemic, rather filled the immense confidence to return to their regular per-COVID lifestyle. The sense of security and freedom has appeared to be a positive sentiment to the housing market, giving enough scope for sellers and buyers. Research also reveals that home-selling experienced positive impetus throughout the most consumer fraction. Fannie Mae’s Economic and Strategic Research Group research reveals that Home Purchase Sentiment Index (HPSI) surged in March from 5.2 points to 81.7, in contrast to last year it has increased by 0.9 points. The HPSI continued to be proportionately leveled in May, rise by 1.0 points to 80.0. Some other interesting learnings from the Fannie Mae’s Economic and Strategic Research Group research are:
53% think it is a good time to buy
40% think it is a bad time to buy
61% think it is a good time to sell
28% think it is a bad time to sell
50% think house prices will increase in next 12 months
14% think home prices will go down in the next 12 months
6% think that mortgage rates will decrease in the next 12 months
54% think the mortgage rates will increase in the next 12 months
82% think their jobs are secured for the next 12 months
17% think their jobs are unsecured for the next 12 months
25% think their income is higher compared to 12 months ago
15% think their income is lower compared to 12 months ago.
Above all, specifically the constituents about personal finance, there is the considerable rise, as the stabilizing markets gave a sense of hope on their job security, which enhances the income and confidence to go ahead with the investments in housing, which wasn’t the same last year.