Houses for Sale

Real Estate Market Predictions For 2021

Without question, 2020 was a strange year for the real estate market. Due to the COVID-19 pandemic, the number of homes for sale across the United States dramatically dropped. Additionally, mortgage rates were low, creating skyrocketing prices despite a downturned economy. In effect, more wealth was created for homeowners while foreclosures continue to mount.

Now that it is a new year, the fallout from this tumult has left buyers and sellers of real estate uncertain. Still, there are hopes that the delays in home buying are now lifting, creating a fertile environment for the real estate market.

In this article, we’ll take a look at a number of real estate market predictions for 2021 based on a variety of real estate associations and companies, including:

  • National Association of Realtors
  • Redfin
  • Zillow
  • National Association of Home Builders

National Association of Realtors

According to the National Association of Realtors (NAR), chief economist of the NAR, Lawrence Yun has stated the following predictions for 2021:

  • New-home sales are expected to jump by 21%.
  • Existing-home sales will climb 9%
  • Home prices will rise by 3%
  • Mortgage rates will rise to 3.1%

Yun provides evidence for these trends as the new Biden presidency is expected to enact a new home-buyer tax credit to help Americans afford a down payment for a home. Additionally, Yun points to new appointees at the Federal Reserve are likely to pursue an expansionary monetary policy to maintain interest rate stability in coming years.

Danielle Hale, chief economist at, predicts a robust sellers’ market as home prices hit new highs, with buyer competition remaining strong. Hale tempers this optimism by stating that increasing mortgage rates and higher prices will ultimately make homes less affordable for 2021.

Due to the new year, Hale also predicts that home prices could hit a new high.To corroborate this prediction, the number of homes for sale in the US reached an all-time low in December 2020, falling below 700,000 units for the first time. Other predictions include:

  • Existing-home sales will climb 7%
  • Single-family housing starts will grow by 9%
  • Mortgage rates will rise to 3.4%


The online real estate brokerage Redfin predicts an optimistic prediction for U.S. real estate markets. According to Redfin chief economist Daryl Fairweather, many homeowners will be eager to take part in the sub-3% mortgage rates while they are still available. This, in part, leads Fairweather to predict home sales performing at levels not seen since 2006,

More predictions from Redfin include:

  • Annual home sales will grow to more than 10%
  • New listings to grow by more than 5%.
  • Mortgage rates will move higher to around 3%.
  • Homeownership rates will rise above 69% (a first since 2005)
  • Borrowing limits for conforming mortgage loans will rise
  • More new homes will be built in 2021 than in any year since 2006


Zillow, one of the most popular companies for online home sale marketing, expects the new year to be “unlike any other”, as buyers, sellers, and builders respond to the challenges that emerged from 2020. Zillow’s predictions for 2021 include:

  • 21.9 percent annual growth in home sales (totalling nearly 6.9 million homes sold, the biggest annual sales growth since 1983)
  • Home price appreciation will exceed 10%
  • Spring will be the busiest season for buyers, with quick sales that exceed listing prices National Association of Home Builders The National Association of Home Builders (NAHB) is optimistic about the future of the housing market in 2021. Considering that residential construction boomed after March and April (the initial months of nationwide lockdowns), the NAHB predicts growth to continue on an upward trend.

Other predictions from the NAHB for 2021’s real estate market include:

  • Single-family construction will exceed 1 million starts (a 2.5% gain over 2020’s final total of 884,000).
  • According to the NAHB Home Building Geographic Index, construction of single-family and multifamily housing shows growth in suburban and exurban areas, especially in medium-sized cities. Further, home remodels should see additional gains throughout the year. These trends are due to telecommuting and remote work, enabling buyers and renters to live further from urban centers.
  • Condo sales will increase due to a lower inventory of houses

The financial website expects mortgage rates to fall in early months of 2021, then climbing to a high of 3.1% According to Greg McBride,’s chief financial analyst, predicts dramatic swings throughout the year. McBride suggest that widespread vaccinations will bring on a strong surge of economic activity, but may need to be checked against inflation.