According to Tian Liu, Chief Economist at Enact, remote work is still driving the housing market buyer preferances. COVID-19 has shaped the choices and home desires, and will continue to do so well into the future. Homes are the complete center of people's lives as they assume the roles of work center, recreation center as well as family living center. According to a recent survey of 1000 Americans, 44% want to work from home without venturing elsewhere. Rental homes fall into the same category: "According to Invitation Homes, a major single-family rental company, rents for new leases grew by 13.8% year over year in second-quarter 2021, while rents for renewals grew by 5.8% year over year. These figures represent significant increases in the value that people place on single-family homes."
For younger buyers, when to buy is a timely question--for each of the past five years, 5.5 million people reach their 33rd birthday--peak homebuying years. Historically low interest rates have helped to push many of these people into the buyers market, rising last year from 2.65% to 3%. The higher rates anticipated this year may bring a correction to prices, or at least a slowing.
Rapid home price growth has also been fueled by the lag in new home construction. Many homes for which permits have been issued are anticipated to be completed in 2022, growing the inventory significantly and impacting the sellers market into a more balanced one. Buyers are cautioned to be realistic in their home appreciation expectations if they buy now--historically homes have provided modest appreciation in value. Like many other investments, they should look to the long term.
Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996
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