February 11, 2021 | Market Update

Market News 2-12-2021

Mortgage Market Update

Double-Digit Growth for Residential Construction

Investment in the residential construction market has risen more sharply than previously anticipated, according to a report published on Feb. 9. The residential construction market has outperformed the broader economy and bounced back from the initial shock of COVID-19 shutdowns. Data from the U.S. Census Bureau shows that spending on residential construction projects continued to rise sharply last year. Residential construction posted a year-over-year increase of 14.6% in October 2020, the latest data available when the report was written.1

Sellers’ Market Until Midyear, Perhaps Beyond

While builders push to meet the demand for more homes, a seller-advantaged market is likely to last to midyear. According to a recent report, home-sale prices increased by 18% near the end of January, compared to a year earlier. Pending sales also grew 28% compared during the same period. Additionally, 55% of homes under contract in late January found a buyer in 14 days or less.2

How to be a Buyer in 2021

It’s not uncommon for buyers in a sellers’ market to feel anxious about rising home prices. There are a few tradeoffs in the decision-making process to help buyers find their right-home, right-price scenario. Location, home type, the amount of work a home needs, financing options, downpayment assistance, or buying with family are all options to consider to arrive at the desired mortgage payment.3

A $15,000 Homebuyer Tax Credit?

President Biden has proposed a $15,000 first-time homebuyer tax credit. If the House and Senate pass it, the buyer could access the funds immediately at the closing table. While the tax break would be beneficial in one sense, other buyers will also receive tax credits, which could put even more upward pressure on prices.4

Buyers’ Love for Open Floor Plans, Break or Breakup?

After decades of popularity, open floor plans have fallen out of favor for some buyers wanting more delineated spaces. But will that trend last? Open floor plans benefit from natural light flowing throughout, among other positive attributes like hosting family gatherings. Before adding walls, consider using rooms with doors for multiple purposes – such as adding a desk to a guest room. Buyers’ taste could revert quickly once the pandemic is behind us.5

Sources: 1Businesswire, 2National Mortgage Professional, 3MSN, 3Housingwire, 3Realtor.com