In a year that brought decimation to nearly every other part of the economy, who could have guessed the housing market would see an unprecedented boom in 2020? Despite global shutdowns and mass unemployment, prospective homebuyers found themselves in heated bidding wars, as market demand increased as much as 40% at one point.
Will this year bring more of the same or will the housing boom peter out? While there is still much uncertainty about the post-pandemic future, here are some trends experts say you can likely expect to see in 2021.

Mortgage rates will remain low.
The historically low mortgage rates we’ve were treated to in 2020 are likely to continue into 2021, and perhaps even longer. Vaccines are starting to roll out in the US, but it will be some time before they are made widely available, and experts say the economic recovery will be slow at first. 30-year interest rates will hover closer to their current average of 2.67% at the beginning of 2021.
But as the vaccine is more widely distributed by the second half of the year, rates may start to creep up slightly to the 3% range, as increased economic activity typically leads to increased borrowing costs. This would still put mortgage rates at opportunistic lows, so don’t expect homebuyers to be deterred.
There will be a boom in new home construction.
With demand expected to stay strong into the coming year and an existed home supply that can’t keep up, experts predict we will see unprecedented levels of new constructions in 2021. Low interest rates also benefit builders wanting to borrow for new construction projects, and since commercial projects have mostly been put on hold in 2020, there is a readily available supply of labor and materials for those who wish to build their dream home.

New homes will cater to different demands.
Homeowner preferences are changing with the new culture the pandemic has created. With millions having been confined to their homes for long periods throughout 2020, there is an emerging trend that people are craving more space. Expect increased demand for larger and more energy-efficient (and money-saving) homes. But forget about those previously popular open floor plans. Privacy is the new norm in 2021. Quality air filtration systems will also be a frequently requested feature.

2020 was a great year for housing, and 2021 is looking no different. The housing market is predicted to stay strong, bolstered by new trends, low interest rates, and a slowly recovering economy.