Consumers Optimistic About 2021 Housing Market

Six in 10 homebuyers and sellers said they think the 2021 housing market will be stronger than the 2020 housing market.

A recent Redfin survey found that homebuyers and high earners feel the most optimistic about the housing market. Close to three-quarters (72%) of respondents who earn $150,000 or more annually feel that the housing market will be better than 2020, compared to 62% of those earning $100,000 to $149,000, 56% of those earning $75,000 to $99,000 and only 52% of those earning $50,000 to $74,000. Only 17% of consumers feel that the 2021 housing market will not be stronger than 2020’s, including just 12% of high earners. 

Homeowners were also more likely than renters to feel that the 2021 housing market will be stronger than the previous year. Sixty-four percent of owners and 51% of renters report feeling the housing market will be better this year, while 15% of homeowners and 23% of renters think the market will be worse than last year.

“Most homeowners are well aware that their home value has increased and they’ve become wealthier on paper over the last year, and they’re optimistic it will continue this year,” said Redfin chief economist Daryl Fairweather. “That belief is well-founded–I expect price growth to continue throughout the year as remote-work culture drives interest in moving to bigger homes in rural and suburban areas–and it’s also an example of the wealth inequality in this country. People who already own homes are the ones benefiting most from the strong housing market, while people who aren’t homeowners will have a hard time breaking into the market this year.”

So, do consumers think now is a good time to buy?

This survey took place in November and December of 2020, and the majority said then was an “OK” time to buy in their neighborhood, 41% reported, compared to 33% who said it was a good time to buy and 15% who described it a bad time to buy. High earners were again more likely to say it was a good time to buy, compared to lower earners.

However, high home prices may be what is causing this discrepancy. The average home sold for $336,000 in December, an increase of nearly $25,000 year-to-year.