More than $2.5 trillion in residential deals is forecast in 2021, more than France’s 2020 GDP
The U.S. residential real estate market is poised to record $2.53 trillion in deals this year, a 17% jump compared to 2020 and the biggest year-over-year increase since 2013, according to a report Tuesday from Redfin.
“To put $2.53 trillion into perspective, it’s roughly equal to the value of Amazon.com and Facebook combined, or the 2020 gross domestic product (GDP) of France,” the report said.
Demand for homes continues to increase as remote work becomes the norm and people seek more space, both inside and out. About 60% of visitors to the Redfin site think they will work from home at least part time going forward, according to an April survey of people who have moved to a new city in the past year.
“We expect 2021 to be an even more active year for the housing market than 2020 because homebuyers have a better sense of what the future looks like,” Daryl Fairweather, Redfin’s chief economist, said in the report. “Employers are providing clarity on permanent remote-work policies, the economy is recovering and mortgage rates remain low. All of these factors mean that we’ll likely see even more buyers enter the market this year and in 2022.”
Low mortgage rates and a shortage of inventory are fueling double-digit price growth, the data showed. The median home price in the U.S. was $353,000 in March, a year-over-year increase of 17%—the highest jump recorded since at least 2012, when Redfin began tracking the data.
Prices could start to stabilize if mortgage rates rise, which is likely to mean even more home sales, Ms. Fairweather noted in the report.
Redfin predicts the South will have the biggest share of sales—$1.09 trillion—in 2021.
“A lot of wealth from the coasts is shifting South,” Ms. Fairweather said. “Affluent homebuyers from New York and San Francisco have moved to places like Florida and Texas during the pandemic, which has fueled home sales and driven up prices in those areas.”
The West takes the second slot, with $696.3 billion in home sales predicted in the report, followed by the Midwest, with $422.6 billion, and the Northeast, with $322.8 billion.
Source: Mansion Global