As recently as September, Zillow analysts released their projections for the housing market over the next 12 months. They predicted an 11.7% increase over that time, piggybacking the home price surge the housing market has experienced over the past few years. Zillow has now increased that expectation. They are forecasting an even larger increase in home prices of 13.6% over that time. This strong long-term outlook is driven by tight market conditions consisting of lack of inventory and a persistent demand for housing. It comes down to a simple fact, there are more people willing to purchase a home than homes available.
By the end of 2021, analysts are expecting 6.12 million homes sold in 2021. That number represents an 8.5% increase over a strong 2020 housing market. September’s year-over-year home sales came in higher than Zillow expected, representing a 7% increase in comparison to the year-over-year August numbers. That increase was the driving factor for the projected increase. Overall, these expectations cast some doubt for borrowers hoping for a downtick in home prices in the near future, and should push potential homebuyers to act now before the expected continued uptick in home prices.
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By: Jon Iacono