“The housing market was a spectacular surprise in 2020—and the positive trend will continue this year. Home sales in 2021 are expected to rise by around 10%. Home prices will also climb, but I expect more moderate increases than we’ve seen, a break for first-time buyers. Mortgage rates will continue to be favorable, staying at or near historic lows of 3% on average. The labor market will strengthen, especially as vaccines become widely available and life moves toward normal.”While today’s historically low mortgage rates are expected to remain relatively low, they are forecast to rise going into next year. This means 2021 could be the best chance for homebuyers to secure such a low rate. In a recent article, Freddie Mac explains:
“The average 30-year fixed-rate mortgage is expected to be 2.9 percent in 2021 and 3.2 percent in 2022.”As long as we continue to see low mortgage rates this spring, we’ll see hopeful buyers on the hunt for their dream homes. Mark Fleming, Chief Economist at First American, confirms:
“By any historic standard, today’s mortgage rates remain historically low and will continue to boost house-buying power and keep purchase demand robust.”The challenge, however, is the lack of homes available for sale. With that in mind, all eyes are on homeowners to see if they’ll sell this spring or continue waiting. Ali Wolf, Chief Economist at Zonda, explains:
“Some people will feel comfortable listing their home during the first half of 2021. Others will want to wait until the vaccines are widely distributed.”With buyers staying active this spring, sellers who want to close a deal on the best possible terms shouldn’t wait to put their houses on the market.