Housing Boom in D-FW and Nationwide Will Continue in 2021
The housing boom that has flown in the face of a pandemic will continue in 2021, and Dallas-Fort Worth is forecast to see one of the biggest sales increases. With home sales and prices surging in many parts of the country — especially in North Texas — top housing economists say they expect even more property purchases in the year ahead. “2021 will be a breakout year, assuming the home sales remain at the second-half level of 2020,” said Lawrence Yun, chief economist with the National Association of Realtors. “Because of the strong home sales and home prices rising, people’s housing activity is at an all-time high. At least during the spring season of 2021, things should be very robust in terms of home sales activity,” Yun said Thursday during a special economic forecast for the National Association of Real Estate Editors.
The Realtors’ top economist predicts a 9% rise in nationwide home sales in 2021. Home purchases have spiked in the past six months after steep declines early in the COVID-19 pandemic.
“The reason why home sales are surging during the pandemic with high unemployment is simply because the mortgage rates are at an all-time low,” Yun said. “The housing market is very sensitive to changes in mortgage rates. It has a bigger impact than the overall job market conditions. Even in a bad economy, people with good, secure employment, they just look at the mortgage rates to make their decisions.”
Home loan rates in the past few months have fallen below 3% for long-term financing. The lower finance costs have softened the impact of the much higher home costs in many metro areas.
Home prices are up about 6% this year nationwide and are 9% higher in North Texas than during the first 11 months of 2019.
Yun is forecasting continued home price gains for most of the nation in 2021, even with the pandemic-induced recession. “Home prices are in no danger of a decline,” he said. “I just hope home price increases moderate so that affordability conditions do not get out of hand.” A sharp rise in prices in many areas is fueled by a lack of properties on the market. “Price increases are due to what everyone knows — lack of inventory,” Yun said. “Simply not enough homes are for sale.”
Nationwide, there is only a 2.5-month supply of houses listed for sale, an all-time low.
Inventories are even tighter in North Texas, with only a 1.1-month supply of single-family homes listed for sale with real estate agents in November...
