7 Mortgage Trends for the Upcoming Year

The world changed in 2020, and the real estate market was no exception. Those who were thinking about buying a house might have benefited from a lower mortgage, but since many homeowners were not in a hurry to sell their home, finding the right one was a complicated venture.

What about now? Is it the right time to sell or buy a home and to shop for a mortgage? It might seem difficult to predict what will happen this year, but here are 7 possible mortgage trends:

Trend #1: Mortgage rates should remain affordable

Last year, mortgage rates have been at an all-time low, and they will more likely remain affordable for the next few months, at least. Rates might even be able to drop in some markets, so if you have been thinking about getting a mortgage, keeping a close eye on mortgage rates is a good idea.

However, as the COVID-19 vaccines will become available to more and more people, things will eventually get back to normal, and the economy will start to slowly recover. This means mortgage rates could rise during the second half of the year.

Trend #2: Mortgage rates might get even lower in large cities

Another upcoming mortgage trend is that the rates might get even lower in large cities. Many people have discovered what it was like to work remotely in 2020, and they are likely to keep working from home in 2021. As a result, many buyers will prefer living in suburbs or in small cities.

Choosing a home located close to their workspace will no longer be a priority, and they will look for bigger homes in quiet areas where they can enjoy spending time in their yard.

As many people choose to leave large cities, those who want to buy a home in a large city might be able to benefit from lower mortgage rates. It may even seem appealing to get a second mortgage if you have the economic means.

Trend #3: There will be a higher demand for houses in smaller cities

If the demand for houses located in smaller cities increases, their prices should increase as well. As more families will want to buy large family homes so they can settle away from big, busy cities, they will have to except higher prices, as well as a lot of competition.

This is great for people who are thinking of selling their suburb home so they can move to a large city, but not so much for people who want to do the opposite.

Of course, those who don’t enjoy working remotely will want to consider staying close to their workspace so they can eventually go back to the office.

Trend #4: The price of houses could rise

The demand for homes in smaller cities will lead to an increase in their selling prices. However, the price of houses in general should rise. Not enough to deter buyers, but probably enough to make many of them carefully shop for the best mortgage rates available to them.

Even though the real estate industry was disrupted by the pandemic, it is now better prepared to face the different challenges that come with this situation.

This means that in 2021, we can probably expect the real estate market to be busier than in 2020, especially in the spring and in the fall.

Trend #5: It should become easier for buyers to find the right house

People who wanted to sell their houses, but decided to wait because they did not want to conduct a real estate transaction during the pandemic, might soon become comfortable with the idea of selling.

More homes will be available for sale, which means people who are looking for the perfect house will have a wider selection to choose from. They will not have to settle for a home that will require a larger mortgage, simply because they did not have a better option.

Trend #6: The demand for condo rentals should increase

Last year, the demand for condo rentals in different markets decreased. The closure of many workplaces and universities was partly responsible for this decrease in interest for condos.

However, the demand is expected to rise again as the world slowly goes back to normal. This means that if you had plans to rent or buy a condo in the upcoming months, you should probably start keeping an eye on condos right now if you want to get a great one.

Trend #7: No new mortgage regulations should be introduced

Finally, no new mortgage regulations should be introduced in Canada this year. The reason why is simple: the government is focusing on helping the country recover from the pandemic. Therefore, introducing new rules that could make it more difficult for some people to qualify for a mortgage is not a priority for them at the moment.

This is great news for everyone who is thinking about getting a mortgage. If you are feeling ready to get a mortgage and buy a house, perhaps you will find that there is no better time than right now.