The end of 2020 won’t necessarily mean saying goodbye to those in favor 2% mortgage rate which have reached historically low levels 16 times in the past 12 months.

In fact, most industry watchers believe rates will stay at same low levels in 2021 as The Federal Reserve uses low rates as a weapon to combat the economic effects of the COVID-19 pandemic.

That means 2021 will always be a good time to buy or refinance a home, according to Len kiefer, Freddie macdeputy chief economist.

“There is certainly a risk that rates will go up, but our baseline forecast keeps them near record lows,” Kiefer said. “In this scenario, the pressure on the housing markets will continue and it is likely that we will continue to see strong growth in house prices, but perhaps not as red as we have seen in recent months.”

Even with interest rates falling by more than a percentage point in 2020, Kiefer said he believes the housing market would still have had a good second half of the year in the absence of the record high rates. . But the statistics – record home sales and price growth – would not have been so “dazzling,” he said.

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A double-edged sword may emerge, Kiefer added, as a COVID-19 vaccine arrives – with possible economic boost – but mortgage rates are rising.

“We have seen the labor market make solid gains since the spring, but the pace of the recovery has slowed down at the end of 2020,” he said. “We are all looking forward to the end of COVID. It may take some time for the economy to fully recover from the pandemic and associated recession.

“With a vaccine perhaps helping to contain the virus, we could see accelerated economic growth next year.”

Other experts have raised political considerations that could change rates in the new year.

Zillow Economist Matthew Speakman Recount Yahoo! Funding the possibility of even greater budget relief, along with important Georgia senatorial elections, could result in larger rate movements in the future. Realtor.com Senior Economist George Ratiu noted first-time buyers could struggle to get a good deal on a loan as COVID cases continue to rise.

Despite the economic turmoil that weighed on the GDP as a whole, a large number of individuals were able to improve their financial situation in 2020 and increase their monthly cash flow, repay high-interest debt or improve their overall financial situation by improving their financial position. refinancing, according to Austin Niemiec. , executive vice-president of Rocket Pro TPO.

This, along with low interest rates, helped spark the massive wave of home buying that agents saw over the year. And the market doesn’t appear to be cooling off in early 2021, Niemic said.

“I don’t think anyone would have thought that this year, in the midst of the pandemic, home buying would eclipse the pace of 2019,” he said. “Historically low interest rates have played a role in this development by offsetting some of the effects of rapidly rising house prices – a trend that doesn’t look likely to end anytime soon. “

Consider the state of mortgage rates over the past 40 years: in the 1980s, Kiefer noted, 30-year mortgage rates averaged 12%; in the 1990s, they were on average 8%; in the 2000s, they were on average 6%; and in the 2010s, rates were on average around 4%.

Based on the downward trend in rates from the 1980s to today, is it possible that 30-year mortgage rates could reach 2% on average in the 2020s?

“Even just a year ago it didn’t seem likely, and it’s certainly not my baseline forecast, but we have to recognize that there is a chance that rates will continue their secular decline,” said Kiefer.

Homeowners should look to modernize their homes with their increased purchasing power in 2021, Niemic added. And when rates return to a more normalized level, look for consumers to continue shopping at home, he said.

“As the new year dawns, we hope to see growth in the economy thanks to the success of the latest COVID-19 vaccines and another government stimulus package,” Niemic said. “Mortgage rates are impacted by the economy, so they will only increase when overall growth supports an increase.”