Around 60% of home buyers and sellers said in a survey by Redfin that they’re optimistic that the housing market will improve in 2021, which is a big leap on what people said in a similar survey the previous year.
High earners and homeowners are the most upbeat about housing’s prospects, the survey of 1,400 people conducted in November and December found.
Almost three quarters of people who make more than $150,000 a year said they believe the housing market will fare better this year than it did in 2020, which is the highest proportion of any group, as determined by their income. In addition, 64% of homeowners said they believe housing will do better this year than it did in 2020. Sellers generally expressed more optimism than buyers, which is likely explained by the recent double-digit gains in home prices.
“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, in a statement. “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.”
Fairweather said that existing homeowners are the most likely to benefit from a hot housing market. On the contrary, first-time buyers will have a much harder time breaking into the market in 2021 than they have had in recent years.
De4spite that, around half of all renters in the U.S. say they’re optimistic about housing in 2021, Redfin’s report found. Renters might be drawn into home ownership by the prospect of record low mortgage rates and the likelihood of more inventory coming onto the market this year, Fairweather said.
“But renters hoping to become first-time home buyers are also more discouraged by rising prices and competition because they don’t get to use the proceeds from selling their current home to buy a new one,” he added.