Will the Housing Market Maintain Its Momentum?

<article class="post-2118 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-2118"><span class="entry-date">April 27, 2021</span><div class="entry-header center-block text-center"><h1 class="entry-title">Will the Housing Market Maintain Its Momentum?</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=Will+the+Housing+Market+Maintain+Its+Momentum%3F&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fwill-the-housing-market-maintain-its-momentum%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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<p><img alt="Will the Housing Market Maintain Its Momentum? | Simplifying The Market" class="webfeedsFeaturedVisual wp-post-image" decoding="async" link_thumbnail="" loading="lazy" sizes="auto, (max-width: 549px) 100vw, 549px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/26121805/20210427-KCM-Share-549×300.jpg" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/26121805/20210427-KCM-Share-549×300.jpg 549w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/26121805/20210427-KCM-Share.jpg 750w" style="display: block; margin-bottom: 5px; clear:both;max-width: 100%;" width="358"/></p>
<p>Last week’s <a href="https://www.nar.realtor/newsroom/housing-market-reaches-record-high-home-price-and-gains-in-march">Existing Home Sales Report</a> from the <em>National Association of Realtors</em> (NAR) shows sales have dropped by 3.7% compared to the month before. This is the second consecutive month that sales have slumped. Some see this as evidence that the red-hot real estate market may be cooling. However, there could also be a simple explanation as to why existing home sales have slowed – <strong>there aren’t enough homes to buy</strong>. There are currently <a href="https://cdn.nar.realtor/sites/default/files/documents/ehs-03-2021-single-family-only-2021-04-22.pdf">410,000</a> fewer single-family homes available for sale than there were at this time last year.<span id="more-44268"></span></p>
<p>Lawrence Yun, <em>Chief Economist </em>at NAR, explains in the report:</p>
<blockquote>
<p><em>“The sales for March would have been measurably higher, had there been more inventory. Days-on-market are swift, multiple offers are prevalent, and buyer confidence is rising.”</em></p>
</blockquote>
<p>Yun’s insight was supported the next day when the <em>Census Bureau</em> released its <a href="https://www.census.gov/construction/nrs/pdf/newressales.pdf">Monthly New Residential Sales Report</a>. It shows that <strong>newly constructed home sales are up 20.7% over the previous month.</strong></p>
<p>Buyer demand remains strong. With more of the adult population becoming vaccinated and job creation data showing encouraging signs, existing-home inventory is expected to grow in the coming months.</p>
<h4><strong>What will this mean for home sales going forward?</strong></h4>
<p><a href="https://www.fanniemae.com/media/38961/display"><em>Fannie Mae</em></a>, <a href="http://www.freddiemac.com/research/forecast/20210414_quarterly_economic_forecast.page"><em>Freddie Mac</em></a>, and the <a href="https://www.mba.org/news-research-and-resources/research-and-economics/forecasts-and-commentary"><em>Mortgage Bankers Association</em></a> (MBA) have all forecasted that total home sales (existing homes and new construction) will continue their momentum both this year and next. Here’s a graph showing those projections:<a href="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/26121806/20210427-MEM-Eng-1.png"><img alt="Will the Housing Market Maintain Its Momentum? | Simplifying The Market" class="aligncenter wp-image-44270" decoding="async" height="488" loading="lazy" sizes="auto, (max-width: 650px) 100vw, 650px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/26121806/20210427-MEM-Eng-1.png" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/26121806/20210427-MEM-Eng-1.png 1000w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/26121806/20210427-MEM-Eng-1-400×300.png 400w" width="650"/></a></p>
<h3><strong>Bottom Line</strong></h3>
<p>Living through a pandemic has caused many to re-evaluate the importance of a home and the value of homeownership. The residential real estate market will benefit from both as we move forward.</p>
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