Specialists Foresee What The 2021 Real Estate Market Will Bring

Surprisingly, one of the bright spots in 2020 is the residential real estate market. After a brief decline at the beginning of the pandemic, home sales soared. The lack of housing on the market and low mortgage interest rates have caused prices to skyrocket. Many experts predict that another strong housing market will emerge in 2021. 

Young people drove home sales growth in 2020, and millennials account for the largest proportion of home buyers, reaching 38%. People with higher incomes will also lead to an increase in home sales in 2020. However, first-time homebuyers are likely to face headwinds in 2021. Homebuyers need more money than ever to buy houses. 

As per data from the National Association of Realtors, the median household income of first-time homebuyers in 2020 is US$80,000, which is higher than the US$68,703 in 2019. The median household income of repeat customers is $106,700. As indicated by a report by Attom Data Solutions, the median house price in most parts of the United States has risen by at least 10%, affordability in most parts of the United States deteriorated in the fourth quarter of last year. 

This is what housing specialists expect for 2021. 

National Association of Realtors 

Despite the existence of the coronavirus pandemic, home sales set many records in the last year. Although the last data for 2020 has not yet been released, the Association of Realtors predicts that new home sales will increase by 20% over 2019 and existing home sales will increase by 3% over 2019. NAR chief economist Lawrence Yun predicts that by 2021, new home sales will jump 21%, and existing home sales will climb 9%. 

Yun Said the Mortgage Rate Would Rise To 3.1% In 2021 

Yun said: “Biden’s tenure may have several major impacts on the real estate market. “The tax credit he proposed as a candidate for homebuyers will help Americans pay for their down payment and maybe more firmly assured. The government provides mortgage guarantees to Fannie Mae and Freddie Mac. Besides, the new staff of the Federal Reserve may pursue an expansionary monetary policy for a longer period, which will keep interest rates stable in the next few years.” 

NAR identified ten markets that showed resilience during the pandemic, and they should perform well in the post-pandemic environment. 


The number of homes available to be sold out will slowly pick up, thus providing relief for home buyers. The number of homes that are up to be purchased in the United States hit a record low in December, falling below 700,000 for the first time. Realtor.com expects existing-home sales to increase by 7%, and new residential construction projects that are emerging for single-family homes are about to begin, which will increase by 9%. 


Online real estate agents predict that as the economy recovers from the pandemic, the real estate market will remain strong by 2021. Redfin chief economist Daryl Fairweather predicts that in early 2021, home buyers will still not be bound by its impact, and they are eager to obtain mortgage interest rates below 3% when mortgage loans continue to be used. Fairweather predicts that by 2021 more new houses will be built than in any year since 2006. By 2021, the prospects for home builders will be more favorable. 

Rising prices of existing houses will drive more buyers to consider new houses. Moreover, due to cheap land prices, home buyers are now more eager to buy houses in suburban and rural areas, so there will be more areas where houses can be built for profit. Redfin predicts that by the end of this year, the homeownership rate will exceed 69% for the first time since 2005. 


The online home sales marketing company expects 2021 to be «a year like no other, as the real estate market will respond to the challenges and changes in preferences that emerge in 2020. Zillow expects that as the economy reopens, demand will remain high, and demand in cities will surge. Zillow predicts that the total sales of 6.9 million houses sold will grow at an annual growth rate of 21.9%, which will be the largest yearly sales growth since 1983. “Buyers continue to compete with each other for the low number of houses for sale,” Zillow predicts that house prices will appreciate by over 10% in 2021 and that the market will usher in a perfect storm. 

Zillow stated that because of the pandemic, “although dense urban life was badly rapped last year, urban life will almost certainly be revived in 2021.” 

National Association of Home Builders 

After the initial decline in builder confidence and construction activity in March and April, the construction outlook improved significantly. The NAHB/Wells Fargo Housing Market Index is a monthly survey that assesses builders’ perceptions of single-family home sales and sales expectations over the next six months. Throughout 2020, the number of single-family families enrolled will increase by nearly 11% compared to 2019. NAHB predicts that by 2021, single-family residential construction will continue to grow. 

Since the Great Depression, this will be the first year that the total start-up of single-family buildings exceeds 1 million, an increase of 2.5% from the final 884 thousand in 2020. The increase in starts will exceed the sales percentage because builders need to catch up with sales in 2020. There are only 4.1 months of new housing supply, and five to six months are considered balanced. The NAHB Housing Construction Geographical Index shows that the construction growth of single-family and multi-family housing has accelerated significantly in suburbs and suburbs, especially in medium-sized cities. 

Still, NAHB predicts that compared with the pre-pandemic period, a large number of workers will have more flexible schedules, which will have a sustained impact that will benefit more affordable markets in remote areas. 

American Enterprise Institute 

The current supply is at the lowest level in the history of 2.3 months, of which six months are considered a balanced market. The construction time for the new building was reduced to 3.5 months. Pinto expects house prices to appreciate by 10.3% and hopes to continue to grow in 2021. He also predicts that 2021 home sales will continue to reach or exceed their 2020 levels, which will be a record mortgage origin year. 

Pinto hopes that the Biden administration will revert to the actions taken by Met Watt as the head of the Federal Housing Finance Agency to keep Fannie Mae and Freddie Mac in nature conservation. 

Mortgage Bankers Association 

By the end of 2020, with the strong demand for refinancing and house purchases, the Real Estate Finance Industry Association predicts that by 2020, the amount of mortgage loans will exceed US$3.6 trillion, which is the most enormous US$3.8 trillion since 2003. MBA predicts that the number of mortgage originations this year will drop to US$2.8 trillion. MBA predicts that sales of existing homes will reach 6.3 million, and new homes’ sales will grow to 989,000. Housing starts will increase to 1.1 million, and prices will rise 5.1%. 


The financial website predicts that mortgage rates will fall further in the first few months of 2021 before climbing. 

Bankrate.com’s chief financial analyst Greg McBride (Greg McBride) predicts that the interest rate will be 3.1% by the end of 2021, but he said there might be sharp fluctuations throughout the year. 

“Mortgage loan interest rates will be a particularly turbulent year. Due to economic concerns, fixed interest rates will fall to lower lows in early 2021. However, due to widespread vaccination, economic activity will be extreme and therefore rebound in the second half of the year. Inflation will follow. Come,” he said. 

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