Are Property Prices in the US Finally Stabilizing in 2021?
It was 2020 that saw a rise in spending across the real estate market only for the question of housing affordability to come into play in 2021. While many believed that the US housing market was set for yet another crisis this year, the trend has steered towards stability in housing prices and a sigh of relief for many who could no longer afford their own homes. It is believed that contrary to soaring market prices just last year 2021 could be the period of affordability and a better time to purchase a house. While a drop of only 0.2% was reported in the cost price of family homes, it is still a good indication of a slower rate across property values.
The change in property rates is also welcomed by the rental housing market as more people are trying to cover their rent during the volatile times of the COVID pandemic and uncertainty in the rental market. For those who were renting and looking to purchase a house in 2020, the sudden jolt in single family home prices meant it was impossible to find value for money. Properties were over-priced and for those who bought during the highs, the real value of the market is going to be reflected in the next couple of months. This doesn’t mean that property prices are going to drop to an all-time low or even reach the levels it was at prior to the pandemic but should rather stabilize without a spike in overall value.
What this means for future homebuyers is that bidding wars and the high competition to purchase property should subside. This trend is not only related to economic pressures and global markets but also a slower progression of home buying across the country. With a lower demand for houses to buy, there is less need for sky-rocketing market prices. More people have been unable to buy homes in 2021 because of affordability issues. One cannot look at the housing market without considering the effects of the pandemic. A greater number of people have lost their jobs or received cuts in their paycheck making it more challenging to afford the property. In the US, there is also a lack of affordable housing which has left many people living paycheck to paycheck. The Federal Government has had to issue rent protection strategies to assist individuals and households against evictions during COVID-19 lockdowns and restrictions. The situation is believed to improve over the next few months as more people return to work and the economy slowly reopens.
To assist more people during challenging economic conditions, low cost housing offered by government and private developers should address the growing need for affordability. With around 4.8 million people in the US dependent on housing assistance from the U.S. Department of Housing and Urban Development (HUD), it is imperative that the current market normalize and provide all persons better opportunities to afford to buy a house and provide for their future.