How Will the Vaccine Affect Home Sales?

After COVID-19 contributed to an unparalleled hot housing market in 2020, many are wondering what the impact will be on real estate now that vaccines are being rolled out in phases. While our world won’t magically go back to pre-pandemic “normal,” there will be many positive rippling effects on the housing market, according to Realtor.com^®.

While there was a significant shortage of resale homes available in 2020, that inventory is expected to slowly increase throughout 2021. As more of the population is vaccinated, Americans will feel safer about listing their homes and looking for move-up houses. Baby boomers in particular were reluctant to sell their homes during the height of the pandemic, but are more likely to move forward with downsizing.

New home construction also ramped up during the pandemic, and the chief economist for the National Association of Home Builders predicts that 1 million single-family homes and townhouses could be built this year. This will also contribute to the inventory available for home buyers.

However, an increase in seller confidence also means more buyers entering the marketplace. While properties may not go flying off the shelves as quickly as last year, buyer competition will still be a big factor in the market. In comparison to the days of 6% mortgage interest rates, even slowly increasing mortgage rates will likely hover around 3%, continuing to entice younger generations to become first-time homeowners.

The price of homes also increased in 2020, and while prices aren’t expected to decrease this year, they are expected to level off. More houses on the market means fewer bidding wars driving up prices among buyers, but the continued high demand for homes will keep prices from dropping.

This year’s real estate market will likely level off to more of a middle ground. “We’re going to settle somewhere in between where we were before COVID and where we were during COVID,” says Danielle Hale, chief economist for Realtor.com^®.

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Eco-Friendly Upgrades for Your Home

Celebrate Earth Day by making upgrades that will improve your home’s sustainability. Here are eight eco-friendly improvements to consider.

1. Purchase reclaimed wood. If you’re installing wood beams, mantels or accent walls, find a company that offers wood salvaged from distressed properties. Not only are you limiting deforestation, you’ll also add a beautiful, unique quality to your home’s design.
2. Install multi-pane windows. You can save money on energy costs and update the curb appeal of your home with new windows. Energy-efficient styles are available in many different materials.
3. Insulate against weather. Much of your home’s heating and cooling is lost through the attic. Increasing the amount of insulation is an upfront cost that will pay off over the long term in reduced energy bills. Install high-quality insulation in walls during a renovation or home addition.
4. Choose eco-friendly flooring. Stylish flooring choices made from green materials have grown in popularity in recent years. Top options include cork, bamboo, natural linoleum, and types of sustainable wood, such as Brazilian cherry or white tigerwood.
5. Install solar panels. You can harness the sun’s radiant energy by installing solar panels that can be attached to your home’s roof or added as a canopy or awning for the patio.
6. Upgrade your core systems. Swap out your traditional water heater for a tankless model, which heats water on demand rather than wasting energy keeping a tank continually heated. HVAC systems can be updated to Energy Star certified units, or replaced with geothermal heat pumps.
7. Choose low-flow fixtures. If you’re updating the kitchen or bathrooms, choose low-flow faucets, showers and toilets to help conserve water and save money on utility bills.
8. Landscape wisely. If you’re renovating your yard and flowerbeds, include eco-friendly choices. Plant perennials (which bloom every year) rather than purchasing new flowers each season. As much as possible, choose plants that are indigenous to your area. In addition to providing food and shelter for insects and birds, native plants are more likely to thrive in your yard.

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Owning Can Be More Affordable Than Renting

Renting a three-bedroom property is more costly than owning a home of the same size in 63% of U.S. markets, according to a recent study by ATTOM Data Solutions. These findings may seem counter-intuitive due to the increase in home prices over recent years, but experts point to dramatically low interest rates as the explanation. Monthly payments can still be more affordable, even with higher mortgage amounts, because of the lower interest rates.

“Home prices are rising … Yet, homeownership is still more affordable, as amazingly low mortgage rates that dropped below 3% are helping to keep the cost of rising home prices in check,” says the chief product officer with ATTOM Data Solutions.

Not surprisingly, the report found that owning a home is more affordable in suburban and rural areas, while renting is still favored in the larger metropolitan areas across the country.

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