2021 Housing and Interest Rate Forecast

Mortgage and Lending with Cambria Mortgage NMLS 274132

What can we say about 2020 that hasn’t already been said on the late night shows, twitter and in every meme on the internet? To say the world is looking forward to 2021 is the ultimate understatement. While 2020 was a solid year in the housing market, the same cannot be said of all industries.

At Cambria Mortgage we feel blessed that we were able to help our clients throughout this year and into the future. Now, on to 2021! Here’s a look at what we anticipate for the coming year: Mortgage forecast

The Influence of COVID-19

The effects of the global COVID-19 pandemic will continue to heavily influence the housing and mortgage market. What this meant in 2020 was historically low interest rates and relocations made possible by teleworking. Even with a vaccine beginning to make its way out into the population, it will still be sometime before the pandemic is declared “over”. The lingering effects of COVID-19 will likely keep mortgage interest rates low, at least for the short-term.

Learn how COVID has impacted the mortgage industry.

As COVID-19 changed the landscape of the traditional office, many people found themselves moving out of the city and into the suburbs. While this trend had been underway before the pandemic hit, it is being exacerbated by the fact that people are able to work from home and are now desiring more space in which to do so. Expect that trend to continue and increase as teleworking becomes the norm.

Home Values

Home values rose significantly in 2020 and that trend is expected to continue in 2021. Some experts are looking at 9% growth in the early part of 2021 settling in around 7% by the end of the year. What does this mean? This means current home owners will see a large increase in the value and equity in their home. While this may have previously led to people selling their current homes and upgrading to a property that meets their current needs, the inventory shortage is making that much more difficult. Expect to see many homeowners tapping into their increased equity to upgrade their current home and stay where they are longer.

Mortgage Interest Rates

It is expected that mortgage interest rates will continue to stay low, at least for the first six months, before slowly creeping a bit higher as the impact of COVID (hopefully) lessens, and the impact of the Biden administration increases. If you haven't refinanced yet, you should probably do it more sooner than later,

See current national interest rate averages

Inventory and Affordability

When looking at home sales, both new and existing, expect only a modest increase as supply is having trouble keeping up with demand. Residential construction faces challenges in higher costs, longer delivery times and labor shortages.

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Part of the issue lies in the number of remodeling projects occurring on existing homes due to the factors outlined above. Looking at existing home sales, certain price points will be harder hit than others. With home values increasing and prices rising steadily, affordability becomes a focus in the new year. First-time home-buyers and those looking in the entry level price point may struggle to find inventory while those looking at more expensive properties will have a little bit of an easier time. However, remember that low interest rates mean an increase in affordability. There is still hope!

2021 looks to be another strong year in the housing market. If you or anyone you know is thinking about buying or refinancing, start with the professionals at Cambria Mortgage. Our fully licensed Loan Officers can look at your specific situation and help you find the loan program that is right for you, right now. Call us at 651-552-3681 or just click here to get your loan application started. We lend in MN, Wi, IA, ND, SD only.


Experience the Cambria Mortgage difference by calling (651) 552-3681, or visiting iMortgageJoe.com.

Cambria Mortgage, Joe Metzler


YES, the counter top people! Equal Housing Lender. NMLS 274132, 322798. Cambria Mortgage lends in the following states: MN, WI, SD, ND, IA, This is not an offer to lend or to extend credit, nor is this a guaranty of loan approval or commitment to lend. The information here may not be up-to-date and may no longer be accurate. Products and interest rates are subject to change at any time due to changing market conditions. Actual rates available to you may vary based upon a number of factors. Consumers must independently verify the accuracy and currency of available mortgage programs. All loan approvals are subject to the borrower(s) satisfying all underwriting guidelines and loan approval conditions and providing an acceptable property, appraisal and title report. (C) 2020 Joe Metzler

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