• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Guthrie Group Homes Knoxville TN Real Estate

Good people! Great Homes!

  • Home
  • About
    • Libby Guthrie
    • Ken Guthrie
  • Real Estate Blog
  • Contact
    • Location
  • Search the MLS
    • Sign Up

CALL 865-966-5005

  • Email
  • Facebook
  • Instagram
  • LinkedIn
  • Pinterest
  • YouTube
  • Real Estate
  • Financing
  • Home Buyers
  • Homeowners
  • Home Improvement
  • Communities
  • Reviews
  • FAQs
Home ยป Knoxville Tennessee Real Estate Blog ยป Real Estate ยป 5 Factors That Reveal Where The Real Estate Market Is Really Headed

5 Factors That Reveal Where The Real Estate Market Is Really Headed

August 17, 2021 by Libby Guthrie

Share with Family and Friends

Share
Share
Tweet
Pin
Share
5 Factors That Reveal Where The Real Estate Market Is Really Headed
5 Factors That Reveal Where The Real Estate Market Is Really Headed

Itโ€™s the old supply-and-demand predicament: Home sales in the U.S. continue at a torrid pace, but the availability of listings remains limited.

Buoyed by historically low mortgage rates, buyers keep shopping for homes, reducing the available inventory and sparking a rise in home prices across the country.

News website The Atlantic summarized the sizzling home market this way:

Pick a housing statistic at random, and itโ€™s probably setting an all-time record. Home prices: record high. Inventory: record low. Percentage of homes selling above asking price: record high. Average time on market: record low.ยน

Meanwhile, homebuilders are contending with an increase in material costs and a shortage of labor. These issues come amid an ongoing shortage of housing.

A study commissioned by the National Association of Realtors found the U.S. is coping with a deficit of about 2 million single-family homes and about 3.5 million other housing units.ยฒ

ย So what can we expect from U.S. real estate? Here are five factors that illustrate where the housing market is today and is likely heading tomorrow.

Rock-Bottom Mortgage Rates To Gradually Rise

Are Mortgage Rates on the Rise - Knoxville TN
Are Mortgage Rates on the Rise – Knoxville TN

Low-interest rates continue to fuel demand from homebuyers. Some experts believe mortgage rates will creep up later this year, but they expect rates to remain near historic lows.3

However, the Federal Reserve signaled in mid-June that it may institute two interest rate hikes as soon as 2023, which could then trigger a more substantial uptick in mortgage rates.4

In June, the Mortgage Bankers Association reported that 2020 closed with the average rate for a 30-year, fixed-rate mortgage sitting at 2.8%. But the association anticipates the average rate climbing to 3.5% at the end of 2021 and 4.2% by the end of 2022.5

As the economy progresses and inflation remains elevated, we expect that rates will continue to gradually rise in the second half of the year,โ€ said Sam Khater, chief economist at Freddie Mac.6

What does it mean for you?

Youโ€™ve likely heard the old saying about โ€œstriking while the iron is hot.โ€ Well, that phrase applies to the current environment for mortgage rates. Itโ€™s impossible to predict with certainty when mortgage rates will rise or fall.

So, when mortgage rates are at or near historic lows (as they are today), you should seriously consider taking advantage of those rates to borrow money for a home purchase or to refinance your existing mortgage.

Home Prices Are Expected To Keep Climbing

Home Sales Forecast for 2022 Knoxville TN Real Estate
Home Sales Forecast for 2022 Knoxville TN Real Estate

Low mortgage rates are sparking interest among homebuyers, but some are running into affordability issues.

In June, the national median list price for a home reached an all-time high of $385,000, up 12.7% on a year-over-year basis.7 And according to the Home Buying Institute, various reports and forecasts indicate home prices will keep climbing throughout 2021 and into 2022.8

While this may be welcome news for homeowners, high prices are pushing homeownership out of reach for a growing number of first-time buyers. In a recent CoreLogic survey, 82% of respondents listed housing affordability as a key problem.9

Younger and first-time buyers, including younger millennials, are faced with the challenge of having sufficient savings for a down payment, closing costs, and cash reserves,โ€ said Frank Martell, President, and CEO of CoreLogic.

โ€œAs we look to the balance of 2021, we expect price rises to continue which could very well push prospective buyers out of the market in many areas and slow home price growth over the next year.โ€9

ย What does it mean for you?

If youโ€™re a buyer waiting on the sidelines for prices to drop, you may want to reconsider.

While the pace of appreciation should taper off, home prices are expected to continue climbing. And rising mortgage rates will only make a home purchase more expensive.

Single-Family Home Sales Remain Robust

Just Listed Knoxville TN
Just Listed Knoxville TN

While record-high prices are sidelining some buyers, the impressive pace of single-family home sales marches on.

Single-family home sales are down from their peak in October 2020 yet are still above the overall level last year. In May 2021, 5.8 million existing single-family homes were sold in the U.S. Thatโ€™s a 45% increase over the 4 million homes sold in May 2020.10

However, home sales saw a 0.9% dip in May 2021 compared with the previous month, the National Association of Realtors says. That was the fourth straight month for a decline in home sales.

The number of home sales has slid recently because of rising prices coupled with a shortage of available homes amid intense demand.10

You May Also Enjoy...  10 Pro Tips for a Smooth Home Move

Fannie Mae expects total home sales to tick up slightly in the fourth quarter and finish the year up 3.8% over last year. They also forecast a slight decline of 2.2% in sales volume in 2022.11

What does it mean for you?

The market for single-family home sales remains quite active. As a result, if youโ€™re a homeowner, you may want to ponder whether to sell now, even if you hadnโ€™t necessarily been thinking about doing so.

With demand high and inventory low, your home could fetch an eye-popping price.

Lack of Inventory Still Constrains the Home Market

Lack of Inventory Still Constrains the Home Market
Lack of Inventory Still Constrains the Home Market

According to the National Association of Realtors, in May there were 1.23 million previously owned homes on the market, down 20.6% from the same time last year.10

This translates to a 2.5-month supply of homes, which is well below the 6 months of inventory typically seen in a balanced market.10,12

According to the Realtors group, this lack of inventory translates into tougher searches for buyers and contributes to a rise in prices.10

โ€œDemand for bigger and more expensive accommodations amid the COVID-19 pandemic, which has left millions of Americans still working from home, is driving a housing market boom.

The inventory of previously owned homes is near record lows,โ€ according to Reuters.13

What does it mean for you?

If youโ€™re thinking of selling your home, now may be the right time to do it. Across the country, itโ€™s a sellerโ€™s market, meaning demand is outpacing supply.

That supply-and-demand imbalance puts sellers in a great position to sell their homes at a premium price.

The May 2021 Realtors Confidence Index from the National Association of Realtors found the average home that was sold attracted five offers, and the association says nearly half of homes are selling above list price.14,15

Construction of Single-Family Homes Sees a Slight Uptick

Construction Of Single-Family Homes Sees A Slight Uptick
Construction Of Single-Family Homes Sees A Slight Uptick

Frustrated buyers may soon find some relief, however, from an increase in new construction.

Economists forecast that 1.1 million new houses will be started in 2021, compared with a predicted 940,000 units just six months ago, with 1.2 million new starts predicted for 2022 and 2023, according to the Urban Land Institute.16

Amid the rise in home construction, builders are coping with rising costs for materials.

In April, the National Association of Home Builders estimated that a surge in lumber prices over the previous year had led to $35,872 being tacked onto the cost of an average new single-family home.17

โ€œShortages of materials and labor have builders struggling to increase production of new homes, though the demand remains strong,โ€ Robert Frick, corporate economist at Navy Federal Credit Union, told the Reuters news service.

โ€œPotential homebuyers should expect tight inventories and rising prices for both new and existing homes for the foreseeable future.โ€18

Builders (and buyers) did receive some good news in June, though: Lumber prices are coming downโ€”although likely to remain above pre-pandemic levels for the foreseeable future.19

What does it mean for you?

Given the issues affecting the new-home market, it may make sense to widen your home search to include both new and existing homes.

Your brand-new dream home may not be available, but you might be able to find an existing home that lives up to your vision.

Keep in mind that we can help you find either a new or existing home and can advocate for you to ensure you get the best deal possible.

https://gghknoxville.com/wp-content/uploads/2021/08/Where-is-the-Real-Estate-Market-Really-Headed-Knoxville.mp4

Are You Thinking of Buying or Selling?

If youโ€™re in the market for a home, youโ€™re ready to sell your house or youโ€™ve simply been wondering whether you should sell, you definitely could benefit from an expert to help you navigate the sizzling hot real estate market.

Letโ€™s set up a free consultation to discuss your situation. We can help you figure out your options and come up with a plan to capitalize on the value of your current property or to find your ideal next home.

Sources:

  1. The Atlantic
  2. Wall Street Journal
  3. Time
  4. Bankrate
  5. Mortgage Bankers Association
  6. Associated Press News
  7. Realtor.com
  8. Home Buying Institute
  9. DS News
  10. National Association of Realtors
  11. Fannie Mae
  12. Real Estate Center at Texas A&M University
  13. Reuters
  14. National Association of Realtors
  15. Realtor Magazine
  16. Urban Land Magazine
  17. National Association of Home Builders
  18. Reuters
  19. NPR

Download your free report – Where is the Real Estate Market Really Headed in Knoxville TN

Related

Filed Under: Real Estate

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Primary Sidebar

Search

Real Estate Article Categories

Real Estate
Financing
Home Buyers
Homeowners
Home Improvement
Communities
Reviews
FAQs

 

Now Showing Homes

Visit Tennessee

Footer

Keller Williams 865-966-5005

11400 Parkside Dr. #120
Knoxville, TN 37934
Office: 865-966-5005
Cell: 865-364-0200

Search the Site

Follow Us on Instagram

guthriegrouphomes

Libby Guthrie
Keller Williams Realty
Knoxville, TN
Office: 865-966-5005 โ˜Ž
Cell: 865-364-0200 ๐Ÿ“ฑ
Good People, Great Homes! ๐Ÿก

Guthrie Group Homes Knoxville
Planning an exterior upgrade?โฃ โฃ According to Planning an exterior upgrade?โฃ
โฃ
According to the U.S.-based National Association of Realtors, these projects offer the highest estimated cost recovery at resale:โฃ
โฃ
๐ŸŒผ Landscaping upgrade โ€” 100%โฃ
๐Ÿณ Outdoor kitchen โ€” 100%โฃ
โ›ฑ New patio โ€” 95%โฃ
๐Ÿชต New wood deck โ€” 89%โฃ
๐Ÿ’ง Irrigation system โ€” 83%โฃ
โฃ
Of course, money isnโ€™t everything! The following improvements delivered the most joy:โฃ
โฃ
๐ŸŠ In-ground pool additionโฃ
๐Ÿ’ก Landscape lightingโฃ
โ›ฑ New patio โฃ
๐Ÿชต New wood deck โฃ
๐Ÿ”ฅ Fire featureโฃ
โฃ
Are you considering an outdoor upgrade? Contact us first to find out how it could impact the value of your home.โฃ
โฃ
โฃ
โฃ
#realestate #realestateagent #homesellertips #homeownertips #homerenovation #outdoorliving
๐Ÿ’ธ Creative Ways to Afford Your First Home ๐Ÿ’ธโฃ
โฃ
Itโ€™s a tough time for rookie homebuyers โ€“ but donโ€™t despair. By using a few creative workarounds, you can still make your homeownership dreams come true.โฃ
โฃ
๐Ÿก Cover part of your mortgage by getting a roommate or leasing out your garage.โฃ
โฃ
๐Ÿก Consider buying a home with friends or family members.โฃ
โฃ
๐Ÿก Ask loved ones for help with your down payment or closing costs.โฃ
โฃ
๐Ÿก Look for special programs and assistance.โฃ
โฃ
๐Ÿก Expand your home search to new areas and rethink your requirements.โฃ
โฃ
Visit our latest blog post for more creative workarounds you can use to afford your first home! โžก [Link in Bio]โฃ
โฃ
โฃ
#realestate #realestateagent #realestatetips #homebuyertips #firsttimehomebuyer
Here is ๐—ž๐—ฒ๐—ป ๐—š๐˜‚๐˜๐—ต๐—ฟ๐—ถ๐—ฒ Here is ๐—ž๐—ฒ๐—ป ๐—š๐˜‚๐˜๐—ต๐—ฟ๐—ถ๐—ฒ on Hill 55, I Corps, May, 1966.  Alpha Company, 1/9. โฃ
โฃ
Ken is inspecting the giant ding where his helmet was hit.โฃ
โฃ
"๐˜ ๐˜ธ๐˜ข๐˜ด ๐˜ญ๐˜ถ๐˜ค๐˜ฌ๐˜บ ๐˜ฆ๐˜ฏ๐˜ฐ๐˜ถ๐˜จ๐˜ฉ ๐˜ต๐˜ฐ ๐˜จ๐˜ฆ๐˜ต ๐˜ฉ๐˜ฐ๐˜ฎ๐˜ฆ ๐˜ข๐˜ญ๐˜ช๐˜ท๐˜ฆ.  ๐˜›๐˜ฉ๐˜ฆ ๐˜ฐ๐˜ฏ๐˜ญ๐˜บ ๐˜ธ๐˜ฆ๐˜ญ๐˜ค๐˜ฐ๐˜ฎ๐˜ฆ ๐˜ฉ๐˜ฐ๐˜ฎ๐˜ฆ ๐˜ ๐˜จ๐˜ฐ๐˜ต ๐˜ธ๐˜ข๐˜ด ๐˜ง๐˜ณ๐˜ฐ๐˜ฎ ๐˜ฎ๐˜บ ๐˜ง๐˜ข๐˜ฎ๐˜ช๐˜ญ๐˜บ."โฃ
โฃ
There's going to be a big welcome home for Vietnam veterans May 11th - 13th on the National Mall in Washington D.C. โฃ
โฃ
Maybe some of you can make that. ๐Ÿ”—in bio โฃ
โฃ
~๐˜“๐˜ช๐˜ฃ๐˜ฃ๐˜บ ๐˜Ž๐˜ถ๐˜ต๐˜ฉ๐˜ณ๐˜ช๐˜ฆ ๐˜ฐ๐˜ฏ ๐˜ฃ๐˜ฆ๐˜ฉ๐˜ข๐˜ญ๐˜ง ๐˜ฐ๐˜ง ๐˜’๐˜ฆ๐˜ฏ ๐˜Ž๐˜ถ๐˜ต๐˜ฉ๐˜ณ๐˜ช๐˜ฆโฃ
โฃ
#vietnamvet #vietnamveteran #thankyouforyourservice #welcomehome #oorah #semperfi #usmc #homesforheroes #LibbysHeroes
Load More Follow on Instagram

Subscribe to our Monthly Newsletter, Home-Made News

Extra! Extra! Read All About It!

  • Enter a valid email address please.
    *Required

  • Absolutely NO Spam!
  • This field is for validation purposes and should be left unchanged.

Find Us on Facebook

  • Site Map

Terms of Use | Privacy Policy | Advertising Policy | Accessibility Statement

Copyright © 2023 ยท Guthrie Group Homes, Knoxville ยท Log in