“Most homeowners are well aware that their home value has increased and they’ve become wealthier,” says Redfin’s chief economist.
Sixty percent of home buyers and sellers say they’re optimistic about the housing market in 2021, a leap above 2020’s numbers, according to a new survey commissioned by Redfin. High earners and homeowners are the most upbeat, shows the survey of more than 1,400 people, which was conducted in November and December.
Nearly three-quarters of respondents who earn more than $150,000 say the housing market will fare better in 2021 than 2020, the highest of any other income group. Also, 64% of homeowners believe the housing market this year will outperform last year. Sellers express more optimism than buyers; recent double-digit gains in home prices likely explain seller enthusiasm.
“Most homeowners are well aware that their home value has increased and they’ve become wealthier on paper over the last year, and they’re optimistic it will continue this year,” says Daryl Fairweather, Redfin’s chief economist. “That belief is well-founded. I expect price growth to continue throughout the year as remote work culture drives interest in moving to bigger homes in rural and suburban areas.”
Fairweather says current homeowners are likely to benefit the most from the hot market, while first-time buyers will “have a hard time breaking into the market this year.”
Nevertheless, half of renters express optimism about the housing market in 2021, according to Redfin’s report. Renters may be drawn to record low mortgage rates and the possibility of greater inventory this year, Fairweather says. “But renters hoping to become first-time home buyers are also more discouraged by rising prices and competition because they don’t get to use the proceeds from selling their current home to buy a new one.”