Redfin forecasts a record $2.53 trillion worth of home sales in 2021, a 17 percent year-over-year increase that would mark the largest annual percentage increase since 2013.
The recent Redfin report notes that the housing market underwent a dramatic rise during the pandemic, fueled by record-low mortgage rates and a wave of remote work. Almost two-thirds (60 percent) of people surveyed by Redfin in April expect to continue working from home at least part time after the pandemic.
The combination of rising demand (home sales) and surging home prices is fueling the increase, according to Redfin Chief Economist Daryl Fairweather. While home prices could grow more slowly if mortgage rates rise, that would result in a more balanced housing market, which could actually lead to more home sales, she said.
“We expect 2021 to be an even more active year for the housing market than 2020 because homebuyers have a better sense of what the future looks like,” Fairweather said in a release. “Employers are providing clarity on permanent remote-work policies, the economy is recovering, and mortgage rates remain low. All of these factors mean that we’ll likely see even more buyers enter the market this year and in 2022.”
The South is expected to lead the way with $1.09 trillion of home sales forecast for 2021, according to the report, followed by the West with $696.3 billion, the Midwest with $422.6 billion and the Northeast with $322.8 billion
“A lot of wealth from the coasts is shifting South,” Fairweather said. “Affluent homebuyers from New York and San Francisco have moved to places like Florida and Texas during the pandemic, which has fueled home sales and driven up prices in those areas.”