There are very few reasons to celebrate 2020, but there is one. The housing market is one bright spot that came out of an otherwise bleak year and is still shining as we head into the first half of 2021. Nervousness across the economy pushed mortgage rates to record lows, which spurred one of the hottest real estate markets in history and led to increasingly high property prices.

As we saw in 2020, the coronavirus pandemic continues to cause an unusually busy real-estate market. The big problem is that while housing demand has risen, builders and suppliers have been constrained, causing limited inventory. That translates to high prices and wild buyer competition.

Let’s take a look at the “good news, bad news” scenario that, from everything I see, is likely to define the housing/mortgage industry in 2021.

UP! UP! UP! The 30-year, fixed-rate mortgage will see a slight rise in rates as the year progresses. Freddie Mac predicts that rates will hover around 2.9 percent and possibly go to 3.2 percent in 2022. This will slow mortgage originations and refinancing, causing property values to moderate.

HEAD TO THE SUBURBS! Remote working will enable families to move to the suburbs and spend more time at home. Single-family housing starts in suburbs will increase. I’m not suggesting a mass exodus, but migration out of expensive cities to less costly metro areas and, yes, suburbs will continue to play out. We have seen this in Santa Fe and it is definitely the name of the game in Albuquerque.

SELL IT NOW? Experts across the board are predicting that home values will continually increase through November. But as construction ramps up again and the COVID vaccine becomes more available, prices will eventually decline. Hesitant sellers should listen up, get on the proverbial ball and realize this time is indeed a perfect storm.

WHAT? I almost left this bit of bad news out of the article, but it is such a vital part of all of the weirdness experienced in 2020 and continuing now: mortgage originations are expected to fall from the unique high in 2020. Enough to cause mortgage brokers to cry at their desk? No, not at all. Even though last year was so busy, we will survive.

SHUT THE FRONT DOOR! The window for the best possible real estate deal of the last 50 years may be closing. As stated above, waiting for spring or, worse, summer will find buyers facing rising interest rates. Of course, as always, a strong financial position is required for buyers. The first half of 2021 is going to be a great time to buy, take it from me. And Freddie Mac, Fannie Mae, and Lawrence Yun, chief economist for the National Association of Realtors.

Stay safe and sound.

Jim Gay was a real-estate broker for 20 years and has been a financial consultant to Fortune 500 companies. He is currently a broker/owner at The Mortgage Place (986-9080) and can be reached at

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