Even with the Covid-19 pandemic that rocked the globe in 2020, the US’s housing industry remained relatively stable. This endearing strength is likely to continue in 2021. The movement of people from cities to suburbs will change the mortgage and housing industry.  Most people are looking for bigger spaces that are away from the congestion in cities.


Outlook on How the Mortgage Industry Will Likely Look Like in 2021

Mortgage Rates

The mortgage rates went to record lows in 2020, and there is a likelihood that they will remain low or even lower even with the expected recovery of the economy. According to the National Association of Realtors and Fannie Mae & Freddie Mac, the rates for the  30-year mortgage will average at 3.075%1 in 2021.

It is a prediction downwards from the already low rate of 3.125% seen in 2020. The Mortgage Bankers Association, however, predicts the mortgage rates to go slightly higher to 3.3%. The general prediction is that the rates will remain reasonably low.

Digital Industry

While the industry has been trying to move to a more digitized workflow, the Covid-19 pandemic helped bring the goal closer.  The era of creating less contact with people and items will see the 2021 mortgage industry going even more digital.

With the automation of processes, lenders will increase their online presence and capacity, which will make them serve borrowers more efficiently. With eClosings as a legal way to close sales, digital mortgaging will also be a trend.   There is an expectation that up to 30%2 of all closing will digitally be initiated and concluded.

Servicing Rights and Repayments

Supposing the 2021 prediction of low mortgage rates stand, then the value in mortgage servicing rights could suffer because of weakened repayment premiums.  The low premiums will significantly erode their value. Government policies can change policies to curb such eventuality should the economy continue to deteriorate. Such an eventuality can see policy changes in the 2021 mortgage industry to create a balance.

Growth in the Housing Market

A close look at the U.S. housing market throughout 2020 shows that the property market grew steadily even with the economic strain.  The prediction is that this trend will continue through 2021 too.

A senior economist at Zillow forecasts that the average home value will go up by 7%3 by the end of 2021. They will be fueled by the low mortgage rates and a higher demand than supply.  In the same breath, these factors will also cause the prices to go higher.  

What Next for the 2021 Mortgage Industry

After a very eventful 2020, we are looking forward to brighter days in 2021 economy wise. There are still many factors that could change the mortgage, especially with a new administration coming in.

The automation of processes and the speed of delivery can leave room for errors and unforeseen challenges. However, we are optimistic that the quality of life will improve, and nothing will deter the stabilizing and growth of our economy.  


“About Mountain West Financial and the CalPATH Home Loan Program

Mountain West Financial is the exclusive lender offering CalPATH, the #1 home loan program for Teachers, Police Officers, Firefighters, and other public employees who serve our local California communities.

You may contact our CalPATH Hotline @ 800-310-7577, seven days a week from (8:30 am to 8:00 pm). A CalPATH advisor will be standing by to answer (any & all) questions you may have about the home buying or refinance process.

We look forward to working with you soon!


Joe Moore

Branch Manager”


Links to external sources used: 

  1. The Property Line: 8 Housing and Mortgage Trends for 2021 https://www.nerdwallet.com/article/mortgages/housing-mortgage-trends-2021
  2. 2021 Predictions for Mortgage Lending https://www.nationalmortgagenews.com/list/2021-predictions-for-mortgage-lending
  3. Experts Predict What The Housing Market Will Be Like In 2021 https://www.forbes.com/sites/brendarichardson/2020/12/16/experts-predict-what-the-housing-market-will-be-like-in-2021/?sh=63a2af5636dc