NAR: Summit Economists Expect Good Things in 2021
By Kerry Smith
More than 20 economic housing experts at NAR’s Real Estate Forecast Summit discussed a post-pandemic 2021 and, as a group, predicted the economy (GDP) will grow 3.5% (6.2% in 2022), home prices will climb 8% (5.5% in 2022) and mortgage rates will average 3% (3.25% in 2022).
WASHINGTON – Expect a post-pandemic economic rebound, improving job conditions and stable interest rates in 2021, according to a survey of more than 20 top U.S. economic and housing experts during the National Association of Realtors®’ (NAR) second annual Real Estate Forecast Summit. Lawrence Yun, NAR’s chief economist, unveiled the consensus forecast.
The group of experts predicted:
- Gross Domestic Product (GDP): Growth of 3.5% in 2021 and 3.0% in 2022
- Annual unemployment rate: 6.2% next year declining to 5.0% in 2022
- Mortgage rates: An average 30-year fixed mortgage rates of 3.0% (2021) and 3.25% (2022)
- Home prices: The annual median will increase 8.0% in 2021 and 5.5% in 2022
- Housing starts: 1.50 million next year and 1.59 million in 2022
- Working from home: The share of the U.S. workforce working from home will be 18% in 2021 – down from 21% in 2020 – and 12% in 2022
- Vacancy rates: Small declines in office and hotel vacancy rates in 2021 and a slight increase in retail vacancies
- Interest rates: 90% of experts predict no change next year; in 2022, most expect a 0.25% increase
“It is an understatement to say the year 2020 has been filled with challenges and full of surprises,” says Yun. “Yet, one astonishing development has been the hot housing market as consumers eyed record-low mortgage rates and reconsidered what a home should be in a new economy with flexible work-from-home schedules.”
In 2020, home sales will reach 5.52 million, the highest annual mark since 2006, with the median home price setting a record high of $293,000, according to NAR.
NAR also identified the top 10 markets it predicts will best weather the post-pandemic environment over the next two years. It chose the top 10 metro areas by considering a variety of indicators, including: unemployment rate; net domestic migration, including movers from expensive West Coast areas; share of workers in retail trade, leisure and hospitality industries; mobility to retail and leisure places; and the fraction of the workforce working from home, among others.
Reprinted with permission Florida Realtors. All rights reserved.