The 12 Hottest Housing Markets in 2021 - Movement Mortgage Blog

Bidding wars. Soaring profits for sellers. A shift in working remotely. A push for amenities. After 2020, some markets will stand out above the rest.

According to National Mortgage News, With the combination of extremely low inventory and interest rates holding near historic lows, forecasts show 2021 shaping up to be a strong year of originations with increased emphasis on buying.

From the Lone Star State to all across the Sun Belt,  the top 12 cities most likely to outperform the national average are: 

12) Houston, Texas

11) Miami, Florida

10) Las Vegas, Nevada

9) Riverside, California

8) Washington, D.C.

7) Dallas, Texas

6) Denver, Colorado

5) Atlanta, Georgia

4) Tampa, Florida

3) Nashville, Tennessee

2) Phoenix, Arizona

1) Austin, Texas

Mortgage delinquencies sink to a pandemic low

Mortgage delinquencies in November fell to their lowest level since the start of the coronavirus pandemic, though the number is still far higher than the rate a year earlier, as reported by CNBC

Just under 6% of all U.S. mortgages — 2.7 million homes — were in some stage of delinquency at the end of November, according to the latest reading by CoreLogic.

The largest share of troubled mortgages are those that are considered seriously delinquent, or more than 90 days past due. Just under 4% are in this deep trouble, compared with just over 1% the previous year, before Covid began its deadly spread.

“The consistent decline in serious delinquency since August is a sign of growing financial stability for families,” said Frank Martell, president and CEO of CoreLogic. “In addition to ensuring that homeowners stay in their homes, the decline in delinquency means fewer distressed sales, which is both a positive for individual households and the overall housing market.”

 While the decline is certainly positive, the pandemic-driven distress in the mortgage market is far from over. The share of loans in government or private-sector mortgage bailout programs now appears to be stuck in place.

Today’s low mortgage rates could squeeze the housing supply years from now

Today’s low mortgage interest rates are making homeownership more affordable for more people and have stimulated a real estate boom that has been a rare bright spot in this uneven pandemic economy.

But according to BankRate, this boom foreshadows a coming bust, especially in cities where housing is already in short supply. The bottom line is that folks are going to hang onto those cheap mortgages, even further restricting inventory for sale at all levels of the market.

Mortgage rates are sure to rise again. When they do, becoming a homeowner will get more expensive for new buyers and moving will be a costlier proposition for many current owners.

“Everybody is locking into these mortgages below 3 percent, and as mortgages start getting up to 4, 4 and a half percent, that doubles a mortgage payment from where you’re buying today,” said Kevin Kieffer, a broker associate with Compass’ EastBayPro Team in the East Bay area near San Francisco. “That disincentivizes you moving, unless you’re relocating out of state. I really think that, more than anything, is going to cause a huge lockdown in inventory.”

Weekly mortgage rate update

Mortgage rates remain the same for two weeks in a row! It’s a tale of two economies. The services economy remains affected by the pandemic, but the production side of the economy remains strong. New COVID-19 cases are receding, which is encouraging and has led to a rise in Treasury rates. However, these treasury rates have not yet impacted mortgage rates, which we can see during this third consecutive week of the same rate. 

The residential real estate market remains solid given healthy purchase demand, while implied real-time home price growth is high, due to the inventory shortage that is plaguing the housing market. 

The Freddie Mac weekly survey shows the average rate for a 30-year fixed mortgage is 2.73%, which is the same as last week, and down 0.74 points from this time last year. 

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Movement Staff

The Market Update is a weekly commentary compiled by a group of Movement Mortgage capital markets analysts with decades of combined expertise in the financial field. Movement's staff helps take complicated economic topics and turn them into a useful, easy to understand analysis to help you make the best decisions for your financial future.