he US housing market has been booming for the past few years. The pandemic put a hold on it for several months last spring, but now that things have stabilized and returned to normal, the housing market is back with a vengeance. There are many factors contributing to this boom in residential housing: low mortgage rates and increase in working from home due to the pandemic among them. This post will go into detail about what these two factors mean for 2021 & 2022's predictions of the US Housing Market.

St. Augustine Housing Market

In recent years, the housing market has grown considerably in St. Augustine. With the average market price up 19.9%, it is one of the fastest-growing markets in Florida as a whole, and popularity in working from home is fueling this increase with 578 homes sold last month alone at an average cost of $354K for just 33 days.

The housing market is flourishing more than ever with buyers scooping up new listings within 24 hours. Homes are selling quicker than they are coming on and St. Johns county saw 768 new listings, 1336 sold homes in the past quarter and 494 went under contract in inventory that stays below 1.5 months.

The housing market has dramatically improved from a year ago, with prices up 10% and low inventory leaving it difficult to find homes. For those looking for new construction, there are not many options; nevertheless, rates are favorable.

Some home builders are seeing an increase in contracts but a shortage of materials, especially lumber. Recently the pandemic shut down several mills which have contributed to the shortage and delayed timelines. Builders must compensate for higher prices on construction materials by passing those costs onto the consumer, you -- the buyer.

Though builders used to offer incentives and more affordable prices, times have changed. Fueled by rising demand for new construction homes, the lumber shortage has put pressure on home builders who are not offering as many incentives as before.

In the resale market, we are encountering multiple offers and homes sold on the first day. This is competitive for buyers and you need to have a strategy in order to make your offer more appealing which will likely mean overbidding. But with that; there is a likelihood that it won’t appraise.

Prospective homebuyers might be in for trouble. Last week,  rates increased sharply from 2.65% to 2.79%. With competition increasing and the housing market booming despite uncertain economic times, prospective home buyers are likely to face challenging hurdles when they purchase a house this year.

We would need a lot of inventory to bring us back to a balanced market, and I'm not so sure when that's going to happen.

While there has been tremendous growth in housing demand, the overall inventory shortage remains extraordinary tight with only 3 months supply available for sale without new construction or additional listings coming on this fall.

Planning to buy a home in St. Johns County? Get ready by getting prequalified and being quick to act. If you are selling your valued asset, be careful not to sell it at too low of value as this will not provide for the future.

Is 2021 the year the Market will Crash?

Home prices have been pushing higher for the past few years. Although it might be tempting to think that soon, the good times will come crashing down and housing prices will plummet, according to economists at a leading bank, this isn't likely.

Remember the Great Recession?

Few people could foresee the housing market crash in 2006, which created a worldwide recession. All three of these factors played heavily into the rapid increase in home prices in 2005 to 2007: Low interest rates, loose mortgage lending standards that were followed by US citizens, and most importantly, America's belief in owning their own homes.

Higher Lending Standards

Loose mortgage lending practices fundamentally changed how mortgage lending is regulated.

Since then, standards have been raised and the process of obtaining a mortgage is now more transparent. Anyone can get one types of loans are illegal while borrowers must undergo rigorous income and asset checks. An entirely new regulatory agency - the Consumer Financial Protection Bureau - was created to enforce this new regulatory framework. Lenders who do not comply with these standards risk.

The housing finance marketplace is now safer and more robust than it was 15 years ago. Any drop in the housing market will be cushioned by these stricter regulations.

Pandemic Mortgage Forbearance

When the housing market crashed in 2007, the influx of foreclosures pumped housing supply into areas with falling prices and weak labor markets. This depressed prices nationwide, plunging homeowners into negative equity.

Despite fluctuations in the housing market caused by the pandemic, mortgage rates remain low.

As of early March 2021, 2.6 million homes held mortgages in forbearance plans. After the pandemic economy had recovered, many homeowners resumed their employment payments and home loans, thus leading to a decline in delinquency rates for mortgages over 60 days past due from 0.6% to 0.5%.

Despite the economic uncertainties, nationwide home sales have been on an upward trend since 2018. In 2020 alone, there were more existing homes sold than in any year post-2005 when delinquencies rose and foreclosures spiked.

In 2021, there is projected to be about 200,000 defaults of homeowners who are in forbearance. Unless the government provides a bailout for these owners and modifies their mortgage terms, they will lose their homes when forbearances end if they do not receive assistance from interventionist groups like Home Again Solutions.

Homeowners’ Equity

Benefiting from rising home values can be more tempting as time passes.

Why does this matter? Having a higher equity cushion means homeowners can delay before defaulting when their home values fall.

In the past decade, American homeowners have seen housing stability and growth which has led to large home equity reserves. In contrast, in 2009 nearly one quarter of mortgaged homes were valued for less than what their owners owed on those mortgages.

Price growth for residential housing will slow, but not stop.

The COVID-19 pandemic in April 2020 had unforeseen ramifications on the housing market — rather than experiencing a significant dip, the sales of existing homes soared.

The combination of solid sales and depleted supplies drove the nation’sthe median existing-home price to $309,800 in December 2019, an increase of 12.9% from the same month in the previous year and marking 106 consecutive months of gains over its prior period.

The sustained run-up in prices will slow to a trickle for the first time since 2007, but entry-level homes will need artificial inflation before they can go back down again.

Factors Contributing to the Housing Market Predictions

Those of us who experienced the housing crash in 2008 really don’t want to go back, but thankfully 2021 will be nowhere near as bad. Home prices stopped declining for a short period of time and even started climbing steadily around one year ago when there was an increase in working from home across the nation due to pandemic worries.

Lack of Inventory

One of the largest contributors to this red-hot market and sky-high prices is a dearth of inventory. This explanation will be widely heard by real estate experts.

The housing supply shortage is attributed to fewer homes being listed for sale: either because owners want to keep the house out of the open market until it has sold, or they have ex-pressed reluctance about strangers (potential buyers) walking through their living quarters.

The second challenge is the slow pace of new construction within the United States. New home construction in America has slowed due to years of sluggish building during and after the Great Recession.

Historic Low Interest Rates

Historic low interest rates, a consequence of the COVID-19 pandemic, have created a steady stream of buyers into the housing market.

The Federal Reserve has no plans to change its interest rate strategy at the moment. If they remain low, buyers will continue to purchase homes- eventually- as even if they are paying a premium now, locking in those rates for 30 years more than offsets any short-term expenses.

Millennial Buyers

Aside from a strong job and low mortgage rates, Millennials are also entering the real estate market for the first time. According to the 2020 NAR Buyer and Seller Report, the median age of first-time homebuyers is now 33 years old — coincidentally also average age that people turn in 2020.

Lending practices have been tightened. Banks do not want to lend money as much. They are more careful about who they will lend money to.

When it comes to the current state of the housing market, Walter Upton famously remarked that as long as NINJA loans are a thing of the past, then a real estate market crash is unlikely.

Is a 2021 Market Crash is Unlikely?

There's not a lot of evidence suggesting that our housing market will experience a crash anytime soon, but the consensus among experts is that it could happen at any time.

Absent a setback to the global financial markets or volatility in individual political arenas, we fully expect demand for housing to remain strong.

This is Likely to Take Place with the Housing Market?

The housing market is slowly returning to normal, according to Texas-based Capstone Homebuyers.

Indeed, Zillow data supports the projections of Hager and other industry professionals. As predicted by some, following the outbreak of COVID-19 last Spring that caused many to sit on their homes for a few months, the new listings nationwide rose 30% in the few weeks between late February and late March.

So what are my housing market predictions?

These insights and predictions add up to an uncertain future. However, there is some good news for homebuyers in this market: their timeline of purchase will have a large impact on what they can get from the housing industry.

Hager points out “Homebuyers who can afford to wait this overheated market will definitely be rewarded.”

In a survey of people who said they were thinking about buying or selling a home in April, the majority - 67% - believed it was currently a good time to sell. However, 47% thought now was a good time to take advantage of low mortgage rates and increase in working from home opportunities sparked by the pandemic.

The strong rate of inflation and high rates will discourage some potential homeowners from entering the market. Hopefully, homes that are currently for sale will be more abundant for them to peruse as sellers release their houses for spring buyers.

Housing sales declined 3.7% and in all major regions of the country over two consecutive months according to data released by National Association of Realtors which shows that there has been a slowing trend since last year.

Sales of homes in February fell to a six-month low, suggesting that a slow housing market is beginning to take effect. But while each of the four major U.S. regions experienced month-over-month drops, all four areas welcomed year-over-year gains in home sales over the past twelve months when these numbers are taken into account

Single-family home sales decreased to a seasonally-adjusted annual rate of 5.30 million in March 2021, down 4.3% from one year ago and 10.4% higher than the month before. The hottest metro areas for single-family homes were Manchester, NH; Concord, NH; Vallejo, CA.; Burlington, NC

Despite the drop

in home sales, housing market continues to be strong. Mortgage rates have risen and long-term bond yields are up this year; but demand remains high. Median sales price for an existing house has risen 17% from last year and increased even more in some regions of the country, fueled by a surge in demand during the pandemic.

The cost of housing reached a historic high for March at an average price of $329,100. All regions across the country are seeing double-digit increases in prices and sales. Looking back 110 months (since January 2007), it was found that each month’s national house prices have increased by more than 1%.

The recent rise in mortgage rates will likely continue to hold back potential home sales. But it doesn't mean that the housing market will crash. They just expect a slowdown in the monthly pace of both existing and new sales later this year. However, on an annual basis, total home sales are still expected to be 11 percent higher than last year.

Mortgage rates are predicted to remain at the same level they were in 2018 and this will help maintain strong demand for homes in 2021. These factors combined with an increase supply of homes on the market following aging housing stock, will push house prices up by 8% by 2021. This higher rate forecast also negates a modestly increased interest rate calculation.

Fannie Mae predicts a $4 trillion single-family mortgage market in 2021 and 2022. According to Freddie Mac, that number will only be $3.5 trillion due to higher rates which could lead to diminished demand for housing at this time.

What Can I Expect about Prices

Housing prices are expected to increase by 6.6% in 2021, and then peak at 7.1 million homes sold in that year according to Freddie Mac’s predictions, before slowing down again for 2022 and stabilizing at a respectable level of 6.7 million homes sold per year until 2027 when all previous growth models will have played out.

New research from the National Association of Realtors predicts that millennials will comprise the largest share of homebuyers in 2020, and a new study by Realtor.com has reinforced this prediction, finding an increasing number of markets that are more cost-efficient for millennial buyers rather than renters.

The median price of homes is on the rise. As an example, in April 2021 the average listing price for single-family homes reached $375,000 which was up 17.2% from last year's price and 11.6% compared to this time last year. Homes sold more quickly than before—they were off the market.

It has been roughly one year since the pandemic put the housing market on hold for several months last spring. Residential real estate markets bounced back rather quickly in these uncertain economic times. The number of homes sold this April was at its highest level in 12 years, which is good news for sellers but not so much for buyers as inventory remains low.

In 2020, the U.S. housing market was 3.8 million single-family homes short of what is needed to meet the country's demand, up 52% as compared with 2018 and Freddie Mac estimates that it will grow to 5.2 million units by 2024.

Housing starts are relatively low, and that is the primary reason for high demand. Single-family housing starts rose last year to 991,000 units but builders would need to construct between 1.1 million and 1.2 million single-family homes a year to meet long-term demand.

Thus, the current pace of price appreciation is expected to remain strong through 2021 and beyond. A decrease in price growth would only occur if either demand or supply softened. Fortunately, there are reasons to believe a change in the trend may be on the horizon as more inventory becomes available later this spring. In addition, we could see an uptick in new homes.

As a result of less listings in the spring-summer buying season and higher rates, home prices will slow down in markets where homes are sitting on the market longer. As they continue to increase over time, this may eventually lead to an end of monthly payments becoming affordable.

Will House Sales Increase?

House sales should increase and prices will begin to moderately climb for now. Younger first-time homebuyers are filling in the gaps left by older people who no longer want to live as prolonged because of the work from home trend described above.

Approximately 4.8 million millennials will celebrate their thirties in 2020 and over the next three years, a significant positive force for the economy and housing market. The main challenge in this upswing in demand is meeting this with a declining supply of homes.

As home prices continue to rise, demand has increased at a rapid pace. Recent Zillow surveys showed that 10% of Americans have moved in the past 12 months and with more households entering the market, many are predicting an uptick for new housing starts.

In addition, we have seen a large number of movers moving to our more suburban towns to take advantage of larger homes and lower costs in comparison with the expensive metro areas. Specifically, we’ve seen increased traffic in housing markets such as Portland, Maine; Bay City, Michigan; Pueblo, Colorado, and many zip codes in Idaho.

Actively combating the housing crisis with remedial measures will go a long way in improving living standards and nationwide prosperity.

This is where buying or selling a home comes into play after extensive diagnosis of regional peculiarities, such as lifestyle needs, proximity to major job sites, and potential for investing.

New home sales decreased 18.2% in February to a slightly higher 775,000 level but prices rose as well.

As new supply ramps up, the median price for startups is expected to grow. Lumber prices have fueled an increase in construction costs and a decrease of low single-family homes but despite this issue, there is still no place else to turn.

How does the Pandemic Effect Real Estate?

It has been nearly a year since the pandemic led to an unstable housing market, but things are now on the upswing. People are seeking out homes and bidding prices higher in competitive situations with very few homes available, boosting home values by double digits. As long as there is no future worldwide pandemic or economic downturn there is good reason to expect.

Real estate brokers project that an improved economy will continue to cause demand for housing, easing sellers' trepidation. Forecasts are expected to be positive in the coming weeks, with real estate and construction offering more building permits over the last couple of years. With a decreasing unemployment rate from last year's highs, rates have also been steadily increasing.

Housing demand in 2020 has been bolstered by the number of working from home and the decrease in unemployment. The pandemic had a slight economic impact but does not seem to have affected housing rent rates which decelerated following an initial surge.

The survey delineates that the reduction of people who are teleworking since January is due to COVID.

The median home price of homes over the last year has been on an upward trend for 38 weeks in a row.

Note: The sentence can be rephrased to read, "The increased cost of living associated with advances in technology," so it is not just about more jobs available due to unemployed workers working from home during the pandemic.

The median price of a home has increased drastically, and if this trend doesn't stop, the housing affordability will be difficult for homeowners in the near future.

Housing is in an upward trend in the country, but there have been some recent setbacks.

  • Demand for housing rebounded much faster than the recovery of available supply.
  • Residential properties in 2020 have sold at the highest rate since 2006, fueled largely by buyers who see a better chance to buy with rates on the rise.
  • Homes sold on the market 25 days faster than last year.
  • One reason for the spike could be it's relatively under supplied. Buyers can't buy what's not for sale which has and will continue to drive up home prices.
  • It has been roughly one year when the pandemic halted new house listings for several months.
  • But a comeback is in store. For nearly a year now, low rates and an increase in demand for houses due to people working from home have fueled a rapid growth of home sales, especially in lower-density areas. The residential housing market anticipate
  • These steady gains in new listings will lead to some big numbers ahead in the home-buying season.
  • The number of housing units for sale on the market is at a 52% drop from last year.
  • The total number of homes actively available for sale is significantly less than last year.
  • As we move into the heart of home selling season, a spike in new sellers is welcome news for buyers.

New Housing Trends for Construction 2021

In 2021, the Mortgage Bankers Association (MBA) forecasts single-family housing starts to be around 1.134 million and new home builders will ramp up production to help relieve the shortage of inventory of homes for sale throughout the United States.

According to the Urban Land Institute, real estate market conditions and values in the U.S. are expected to improve in 2021 and trend even higher in 2022; single-family homes will outperform other sectors such as commercial, retail, hotel, and rental. According to a survey of 43 economists at 37 leading real estate organizations across the USA, housing

The National Association of Home Builders ran a study and found that lumber prices have jumped 250% since April 2020, which has led to the cost for an average home rising by $36,000.

It is extremely difficult to purchase a new home when the price of lumber continues to soar. Members of NAHB are working with local and national government officials so that rising prices will not jeopardize building contractors.

The National Association of Home Builders also gets input from builders on how confident they are in the housing market based on buyer behavior, sales, and incorporates any forecasts as well. The building permits have rebounded from pandemic lows and builders are racing to fill the gap between supply and demand.

Market sentiment among builders fell in March due to higher construction material prices, leading supply shortages and high demand. In April 2018, lumber prices plummeted from $240 a board foot to less than $200. Hardware manufacturers such as Home Depot, Lowe's Companies, Inc. The Home Depot had also recently announced plans to raise the customer's purchase minimum.

One of the three major home price indices fell in March, while two remained unchanged.

The index gauging current sales conditions fell three points to 87, while the one measuring sales expectations over the next six months improved. The gauge charting traffic of prospective buyers stayed at 72 for three consecutive months.

Real Estate "The Florida Real Estate Market In 2021"

In the past year, due to lower interest rates and the Covid-19 Pandemic, there has been an in explosive demand for housing. In a new report from the Florida Realtors Research Department, Florida home-and-condominium-sale prices have increased for 112 consecutive months. The statewide median sales price in February was $314,900, an increase of 16.6% from 2020. The median price for Florida condos and townhomes home prices was $233,240, also up 16.6% over 2020.

According to a recent report by the national association of realtors, closed sales in condos and town homes throughout Miami Beach, Sunny Isles Beach, Hallandale  Beach, Surfside or Hollywood Hills are up 29% over February of last year, and single-family homes are up 15.7%.

With the number of single-family homes for sale down 56.3% over the past year, many home buyers are waiting out prices to decline. But with inventory low and multiple recent sales, it does not appear these hopeful home buyers will be rewarded with discounted prices.

There is a lack of available homes for sale in Florida, despite the sustainable economy and low rates. The housing market is very active and little inventory has been released for buyers to choose from.

In Fort Lauderdale, condos under $600,000 and near the ocean have been strong sellers. Older buildings priced at less than $500s are seeing dramatic inventory decreases.

Due to the pandemic last year, the housing market has been sluggish. However, it is expected to pick up at a rapid pace. The Fort Lauderdale area in particular had an increase of 45% for single-family homes priced between $400,000-$600,000 from January 2020-February 2021.

In the last year sales have gone steadily up for homes in Fort Lauderdale. Luxury condo sales and home prices between $999,999 to $1 million+ are up almost 67% over this time same time last year

Pompano Beach, a beach town formerly known for its sleepy atmosphere, has seen huge price growth in the last few years. A project with six oceanfront condos priced over $4 million (an unheard of price for Pompano Beach) recently began construction and all six sold out before the first foundation was put down.

After the pandemic, many in Florida left crowded cities. Now, the low taxes, good weather, and thriving economy are fueling a housing boom.

Home Price Growth Analysis for Saint Augustine, FL

Saint Augustine homes are being sold at a median price of $272,279. The average price per square foot is $144 and the city sees 12% more 3 Car Garage homes than other real estate markets in Florida.

In Saint Augustine the home price growth, most of the median home values are around $326,945. This represents the middle price tier of homes and only values are adjusted for seasonal changes. Compared to last year's prices, home values have gone up by 12.4%.

New Construction in St. Augustine 2021.

In 2021, the MBA forecasts single-family housing starts to be around 1.134 million. The forecast for 2022 is even rosier at 1.165 million homes started and in 2023 estimates rise again to 1.210 million homes started nationwide.

In 2021 and 2022, single-family homes will outperform other sectors, including commercial and retail goods. This information comes from a recent report by the Urban Land Institute (ULI).

According to a recent report from the National Association of Home Builders, lumber prices have skyrocketed nearly 250% since April 2020. This has caused an average price increase for a new single-family home by nearly $35,000 within just six months' time.

Despite the soaring lumber prices, new construction demand continues to outpace supply and shortages in just about every building material category is creating delays for contractors. National Association of Home Builders (NAHB) is working with government officials to develop solutions to these sharp price increases which threaten housing affordability across the nation.

There has been a boom in the number of existing homes sold in St. Johns County over the past year

Prices have steadily increased and the economy has seen an unprecedented decline as a result of a pandemic, there stands to be enough demand for property.

The thriving St. Augustine, Florida housing market has remained resilient in the face of fears about Ebola and continued high unemployment rates.

In spite of the economic uncertainty, there has been a booming residential housing market. More single family homes were sold in July this year (854) than have been sold in any month since 2006.

Now, it isn't because the prices are so low. The median sale price inflated to $393,990 in July, significantly higher than last year's of $355,000.

The NEFAR report says: "In August, showings and pending sales remained at strong levels while housing inventory remained limited, continuing the competitive bidding market we have seen in recent months. With stock indexes at or near record highs as mortgage rates near record lows, signs point to a busy fall housing market."

In the St. Johns County area, the school district draws people to move closer and establish themselves here for fear of losing important access to education.

Following June’s market of heightened sales and high prices, July’s real estate market was as busy in the region.

In the past year, 3,514 homes were sold in an area previously covered by the Northeast Florida Association of Realtors. The association covers six counties and includes only three of St. Johns County’s communities.

The median sales price in July was $265,000, up 9.8% over the previous year’s price of $255,000 and up $10k from June’s average of $255,000. This is an increase of 15.3% year-over-year with average prices also rising to $325,265. June’s average price was $309,757.

Current tight housing inventory levels, coupled with a shortage of sellers entering the market (3,523 new listings this past July), continue to create an imbalance between buyers and sellers. With five- to six-months a balanced market between demand and supply — Northeast Florida’s July market closed with just 2.5 months’ supply, down 34.2% from a year ago.

In July 2019, there were 9,905 homes. In this July, 6,943 are on the market. That's a 29.9% dive.

Competition among buyers has driven up prices in certain markets - causing about 16% to spend more than purchase price.

Buyers are taking advantage of low interest rates.

How Safe is the US Housing Market for the Next Few Years?

The US housing market is booming in 2021 & 2022. Economic uncertainty has yet to slow down this sector, with residential construction and new home sales at all-time highs not seen since the mid 2000s.

After a brief slowdown last spring when the pandemic halted housing markets, lending rates and improvements to the job market are bringing first-time buyers back into the market. With existing home sales on track for their best year since 2006 and prospective homebuyers filing mortgage applications at a rate not seen in more than ten years, we're seeing remarkable opportunities ahead.

The Fannie Mae Economic and Strategic Research (ESR) Group has raised its estimated growth rate in 2021 by nearly a full percentage point after great increases during the end of 2020.

The housing market has been steadily strengthening since the COVID-19 pandemic subsided one year ago. Growth has been supported by a waning in workplace restrictions and progress of the vaccine, while uncertainty remains over how long recovery will take and what speed it'll happen at. With growth tipped to pick up in Q2, we anticipate rates around 9%

The ESR Group forecasts housing activity to continue strong in 2021, but growth is expected to decelerate from the torrid pace set in 2020. While home sales are projected to rise 6.2% this year, the monthly pace will likely slow throughout much of 2021.

Despite sluggish home supply, the home price appreciation has been predicted to be 8.0% in 2021 from 4.2%.

As the Federal Reserve has made clear that it will not raise interest rates in the near future, many households have seized this opportunity to refinance their existing mortgages. The end of forbearance policies is also looming and remains uncertain, as they provide a temporary pause in mortgage payments for those who may be struggling financially.

The past year has been a time of change in the real estate sector, but the market is finally on an upward trajectory. One question we hear frequently right now is how those changes might impact future sales volume and what that might mean for foreclosures when Forbearance/moratoria are lifted. With rebalancing, as much as 70% of homeowners have more than 20% equity.

Despite uncertain economic times

Housing markets have seen significant improvement. According to Fannie Mae, the recovering job market and higher rates of homeownership will limit the number of foreclosure sales in 2021.

There are a number of overllook indices that vary by region, time frame, and target audience. Fannie Mae's National Housing Survey offers an indication if how our communities are recovering from the pandemic and what buyers and sellers think. The HPSI is up 5.2 points to 81.7 in March 2o21 with a YOY... Year over year, the HPSI is up 0.9 points.

Home-selling sentiment experienced a positive momentum across most consumer segments — nearly reaching pre-pandemic levels — and generally indicative of a strong seller’s market. Alternatively, while the net ‘good time to buy’ component increased month-over-month, it is still difficult for buyers due to high prices and a lack of supply.

The last survey reveals that the percentage of respondents who think it is ‘a good time to sell a house’ versus those who believe it is ‘a good time to buy one.

  • The market is good for buyers as more are finding it a good time to buy.
  • A greater percentage of respondents say that it is time to sell a home, while fewer believe that now is the wrong time. As a result, speculation as to whether or not now is the best (or worst) time to sell one's house fluctuates little over last month.
  • The percentage of respondents who expect home prices to increase within the next 12 months has increased from 47% last month to 50%. The percentage of those who think they will decrease has decreased by 8% as well.
  • This is reflected in that net share of Americans surveyed, which increased 7%.
  • The respondents who think rates will go down decreased from 8% to 6%. In opposition, the percentage of people expecting an increase in mortgage rates increased from 47% to 54%. The share that predicts an unchanged situation also decreased. Therefore, it is safe to say that as of now, the net number who predict that mortgage rates will decrease is announced.

What about the FED?

The Federal Reserve Bank of New York's Center for Microeconomic Data released the latest survey in March, which indicated continuing upticks in inflation, home price and spending rates. As well, households had a more positive outlook on their current and expected financial situation--in part due to increased access to credit.


Median year-ahead home price change expectations increased to 4.8%, a new peak, in March. The increase was largely the result of respondents from the "west" and "midwest" census regions.

Median inflation expectations at both one-year and three-year horizons also increased by 0.1 percentage point each to 3.

The US housing market has experienced a rapid increase in demands through the pandemic and its after effects.

The market before the pandemic was remarkably strong. The coronavirus crisis response was unprecedented.

The federal government ordered a de facto shutdown of the entire private economy, closing an estimated eighty percent of businesses and causing unemployment to soar to at least ten percent. Now we are in a period where we can compare housing trends.

The data from Realtor.com’s April 2021 housing statistics shows that listing prices continue to increase by double-digit rates compared to the same time last year, fueled by higher buyer demand. Home sales have increased, with more existing homes sold in 2020 than at any point since 2006.

Mortgage interest rates were cut to historic lows recently, but experts predict they'll start climbing again as early as 2021. As the economy continues recovering from tectonic shifts due to jobs moving overseas and technology taking over more work, experts say this is one of things that caused interest rates to fall in the first place.

Experts predict that as the economy continues to recover, mortgage rates will likely rise. This, in turn, would encourage more consumers to buy homes now rather than later.

But that doesn’t mean interest rates will shoot up overnight. The increase is likely to come in fits and spurts marked by a gradual rise over time.

Mortgage Rates Predictions for 2021

The housing market predictions for 2021 and 2022 indicate that inflation is on the rise as of late. This means mortgage rates are likely to follow suit, especially if interest rates increase with the strengthening economy.

The 10-year Treasury yield bottomed out in August 2020 and has been trending back upward for the next few months. This should provide a key indicator to mortgage rates.

Exactly when mortgage rates will increase and how much higher they’ll be depends on many factors. The pandemic, the economy and inflation are three of the most important to pay attention to if you want a good estimate.

A small increase in rates can have a big impact on your bottom line. We’ve already seen rates increase by around 0.5% since the beginning of the year, which has increased monthly payments by $81 for a 30-year mortgage with a balance of $300,000. A small difference will cost effect you wallet.

Interest rates for mortgages are falling and nearing 3%. When you shop for a mortgage lender, make sure to be aware of not just interest rates when choosing one. Before you sign on the dotted line, read every "Loan Estimate" thoroughly to see what fees you'll actually be charged.

Mortgage rates are as low as they have been in years, and there is little indication that will change soon.

May 15, 2021
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