There are a wide range of estimates, especially on house prices in 2021, with price forecasts ranging from increases of 2% to 10%. These forecasts use different measures, but that is a very wide spread.
The key in 2021 will be inventory. If inventory stays extremely low, there will be more housing starts and a larger increase in prices. However, if inventory increases significantly, there will be fewer starts and less price appreciation.
Towards the end of each year I collect some housing forecasts for the following year.
The table below shows a few forecasts for 2021:
From Fannie Mae: Housing Forecast: December 2020
From Freddie Mac: Freddie Mac Quarterly Forecast: Housing Market Continues to Rebound as Mortgage Rates Hover at Record Lows
From NAHB: Housing and Interest Rate Forecast, 12/8/2020
From NAR: 2020 Real Estate Forecast Summit
From Wells Fargo: 2021 Annual Economic Outlook
Note: For comparison, new home sales in 2020 will probably be around 845 thousand, and total housing starts around 1.375 million.
| Housing Forecasts for 2021 | ||||
|---|---|---|---|---|
| New Home Sales (000s) | Single Family Starts (000s) | Total Starts (000s) | House Prices1 | |
| Fannie Mae |
872 | 1,107 | 1,444 | 2.1%2 |
| Freddie Mac |
2.6%2 | |||
| Goldman Sachs | 736 | 1,440 | 3.7% | |
| MBA | 960 | 1,121 | 1,473 | 2.0%2 |
| Merrill Lynch |
950 | 1,500 | 4.0% | |
| NAHB | 884 | 1,034 | 1,383 | |
| NAR | 1,500 | 8.0%3 | ||
| Wells Fargo | 1,440 | |||
| Zillow | 10.3%4 | |||
| 1Case-Shiller unless indicated otherwise 2FHFA Purchase-Only Index 3NAR Median Prices 4Zillow HPI |
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