Rising Rates, Declining Post-Pandemic Demand Will Impact the Year in Housing
GREENSBORO, N.C.–(BUSINESS WIRE)–
While 2020’s final housing figures confirm it was a year of high demand and record-low inventory, 2021 is likely to mark a return to more normal levels of home-price growth, according to the Spring edition of The Housing and Mortgage Market Review (HaMMR), released today by Arch Mortgage Insurance Company (Arch MI), a leading provider of mortgage insurance.
Rates are expected to continue to rise, while the unprecedented demand for housing driven by COVID-19 will probably decline over the year.
“While home price growth was incredibly strong in 2020, historically low mortgage rates have meant that affordability was not stretched to the same extent for median-income homebuyers in large parts of the country,” said Rob Hardie, head of Data Analytics for Arch’s Mortgage Group. “However, with interest rates ticking up to start off 2021, the question naturally arises as to what this will do to affordability and how it will impact the housing market. We believe we have seen this before in 2018, and if 2021 plays out in the same way it would be a satisfactory outcome.”
The ongoing problem of housing supply is also addressed in the Spring HaMMR, which explores the reasons for a shortage of affordable inventory and the current housing policy proposals to remedy the situation.
- The Housing and Mortgage Market Review is posted at archmi.com/hammr. The Spring 2021 issue assesses the likely prospects of housing in 2021 in the wake of COVID-19, rising rates and the lack of housing inventory.
- Policy expert Kirk Willison, Arch MI’s VP of Government and Industry Relations, reviews the principal factors contributing to the shortage of homes for sale.
About Arch Mortgage Insurance Company
Arch Capital Group Ltd.’s U.S. mortgage insurance operation, Arch MI, is a leading provider of private insurance covering mortgage credit risk. Headquartered in Greensboro, North Carolina, Arch MI’s mission is to protect lenders against credit risk, while extending the possibility of responsible homeownership to qualified borrowers. Arch MI’s flagship mortgage insurer, Arch Mortgage Insurance Company, is licensed to write mortgage insurance in all 50 states, the District of Columbia and Puerto Rico. For more information, visit archmi.com.
Cautionary Note Regarding Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This release or any other written or oral statements made by or on behalf of Arch Capital Group Ltd. and its subsidiaries may include forward-looking statements, which reflect our current views with respect to future events and financial performance. All statements, other than statements of historical fact, included in or incorporated by reference in this release are forward-looking statements.
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The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included herein or elsewhere. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Source: Arch Mortgage Insurance Company
Arch Capital Services LLC
Greg Hare, 336-333-0416
Claire Haley, 925-451-4507
Source: Arch Capital Group Ltd.