46 | MARCH 25 • 2021 

YOUR HOME

A 

analysts expect the 
housing market to 
remain strong and sta-
ble in the coming year.
“Despite the uncertainties 
of the pandemic, the housing 
market performed well in the 
second half of 2020,
” says Sam 
Khater, Freddie Mac’s chief 
economist. “Low mortgage rates 
and the ability to work remotely 
continued to propel demand for 
housing, which is reflected in 
home sales reaching levels not 
seen in 15 years.
”
Here are some of the biggest 
takeaways of Freddie Mac’s 
Quarterly Forecast:

• Interest rates are likely to 
remain low. The average 30-year 
fixed-rate mortgage (FRM) hit a 
record low over a dozen times in 
2020. The low interest rate envi-
ronment is projected to continue 
through 2021, with the 30-year 
FRM expected to average below 
3 percent. Low rates are good 
news for buyers looking to pur-
chase a home, and homeowners 
looking to refinance.
• Home sales to remain high. 
The demand for housing is 
expected to remain strong in 
2021, creating a sellers’ market. 
This year, home sales are expect-
ed to average 6.5 million for the 

year.
• House prices to grow moder-
ately. In the second half of 2020, 
the high volume of home sales 
and low supply of housing drove 
up house prices. In 2021, house 
price growth is expected to 
moderate for the full year.
• Refinances to start declining. 
Low mortgage rates spurred 
refinance activity in 2020, boost-
ing mortgage originations (the 
process in which borrowers 
apply for a home loan) to histor-
ic highs. 

As mortgage rates rise mod-
estly in 2021, refinance activity 
should start to slow. 
“While many homeowners 
took advantage of these low 
rates last year, evidence suggests 
that many lower income home-
owners still have the opportuni-
ty to strengthen their financial 
position by refinancing,
” says 
Khater.
For more insights on 
housing, visit freddiemac.com/
research. For homebuying and 
homeownership resources, visit 
My Home by Freddie Mac.
Many of the trends that 
shaped the market last year, 
especially historically low 
mortgage rates, will continue to 
drive housing activity in 2021. 
As you embark on your 
journey toward your home 
goals, be sure to have a firm 
understanding of today’s market 
conditions. 

Should You Buy or 
Sell a Home in 2021? 
Here’s What to Know

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