Realtor.com recently launched its 2021 housing forecast and it appears the market next year will continue to favor sellers. The report predicts that record-high prices will continue rising in 2021, much to the disappointment of first-time buyers and those on a budget. Mortgage interest rates, which hit historic lows this year and helped fuel the incredible growth in U.S. housing markets, are also expected to tick up again, making monthly housing payments even pricier.

Metro Denver is expected to see a 12.5% increase in home sales next year, which ranks fourth highest out of the 100 metro areas examined, behind only Sacramento, Harrisburg, Pa., and Charlotte, N.C., according to the forecast. But home prices — after revving at a 12.8% annual pace in October — will run a more modest 5.4% locally, ranking Denver 33rd on that measure, tied with Columbia, S.C.

Danielle Hale, chief economist with the realtor.com, calls for rates on a 30-year mortgage, now below 3%, to rise to 3.4% by the second half of next year, meaning they won’t help offset record-breaking prices. Given how elevated prices are in metro Denver relative to incomes, buyers here may have a harder time digesting the added costs.

There is a bright spot for buyers, however. According to the forecast, more homes are likely to become available in the last six months of 2021, giving buyers more options to choose from and taking away some of their urgency. With a larger selection, buyers may not be forced to decide in mere hours and will have more time to make up their minds.

The bump in inventory expected to be due to a combination of more sellers listing their properties as well as builders completing more residences. Realtor.com predicts single-family housing starts, which are homes that have begun construction but aren't yet completed, will rise 9%. And it's sorely needed as there was an estimated shortfall of almost 4 million new homes heading into this year.

If buy or selling is on your radar for 2021, Metrowest would love to help. Give us a shout today to discuss your options!