New Home Purchases Set To Break Records In 2021
According to the latest forecast, the mortgage industry is in for a banner year in 2021. Let’s get in on that!
The Mortgage Bankers Association made headlines this week with its prediction that new home purchases will continue climbing next year, hitting a record 1.60 trillion bucks in 2021. This prediction is 12% higher than what was forecast for 2020.
Super low interest rates are also likely to continue through 2021, with the 30-year fixed-rate mortgage increasing slightly to 3.3% before bumping up to 3.6% in 2022 and 4.1% in 2023.
While home purchases are expected to keep growing, refinances are expected to slow down. “The economy, labor market and housing market have all seen meaningful rebounds since the onset of the pandemic, but there is still profound uncertainty,” MBA Chief Economist Mike Fratantoni said. “Additional waves of the virus could lead to further lockdowns and more job market instability.”
“On the other hand, another pandemic-related stimulus package would result in faster economic growth and additional support for the housing market,” said Frantoni, “albeit with slightly more upward pressure on mortgage rates.”
Despite all the ambiguity amid the pandemic, the MBA is betting our economic recovery will roll on.
Christy Rosen Clement is a Pricing Strategy Advisor®, Seller Representative Specialist®, Military Relocation Professional® and REALTOR® at Palermo Real Estate Professionals in South Tampa
