February 2021 Real Estate Market Review
Housing demand is still stronger than normal so far in 2021, while tight supply continues to put upward pressure on housing values. Robust price growth will not ease up until some balance between supply and demand is restored.
Signs of Improvement on the Supply Side: While the number of active listings remained near the lowest level since the pandemic began, the rate of decline of new listings appears to be leveling off. The first week of February’s average daily new listings saw its first weekly increase in three weeks based on the weekly MLS data.
The number of first-time buyers reached the highest level in ten years this past summer, with nearly two of five homes being sold to buyers who purchased for the first time. This might be due to the all-time-low interest rates making mortgage payments not that much higher than paying rent, especially in LA where rents are so expensive.
Interest Rates: The typical rate on a 30-year fixed-rate mortgage increased in the second week of February from 2.73% to 2.81% and now around 3%. Some additional increases in mortgage rates are expected but rates will most likely remain low by historical norms.
Based upon strong January closed sales, encouraging weekly data for February, low rates, and ongoing growth in various measures of buyer demand, the California Association of REALTORS® has revised its forecast for home sales and prices in 2021 higher than previously estimated. Existing single-family home sales are expected to rise by more than 11% this year and home prices are expected to increase by 8%.
In summary, we see there is no slow-down coming for now and as the Spring and Summer selling seasons around the corner and improving pandemic conditions, hopefully we will see more inventory and choice for buyers over the next few months.
If you have any questions, please don’t hesitate to reach out!
Michel@BronRealtyGroup.com or (310)467-8042