2021 mortgage rates? A little higher than 2020!
How did you ring in the New Year? For most of us, the New Year’s celebrations were toned down, spent wearing 
comfortable clothing in front of the screen. Basically, just like we spent most of 2020. But there’s change on the way, in the form of a new presidential administration.
However, experts agree that the impact on mortgage rates in 2021 will also be a gradual, muted affair. Keep in mind, that at the beginning of 2020, 30-year averaged well above 3.5%, and fell to below 2.75% by the end of the year.
As Ethan Rotberg writes in Yahoo! Finance, rates won’t likely rise when the presidency changes hands; it will take more than that.
“If the COVID crisis takes another bad turn, investors could pull money out of stocks and pour it into Treasury bonds as a safe haven,” Rotberg said. “That would cause the yields (interest) on Treasuries to sink, and mortgage rates usually following the same path.”
Yet no one thinks rates will stay this low for the duration of the year, barring a second/third/fourth COVID-19 surge/lockdown/outbreak. All of the experts polled in the Yahoo! Finance article expect a normal-ish mortgage rate of around 3.5% for 30-year by the end of the year.
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And that’s good news for future home sale demand
The rates environment is no likely to impact the huge demand for buying homes, given that inventory levels are going to remain way too low, probably for all of 2021. That’s based on comments Zillow economist Jeff Tucker made in an interview with Yahoo! Finance.
While Zillow is a perennial headline-grabbing brand, the issue of inventory is actually an expert-area for the online property listing service. And Tucker’s outlook is solid.
“There's a lot of people entering their 30s right now,” he said. “There's about 3 million more people, about 23 million 
versus 20 million 10 years ago, who are in the key age range of 30 to 34. That's the age at which Americans tend to buy their first homes, and so they are really trying to come into the market, and I think a lot of them sort of accelerated that decision in part due to the pandemic.”
The true economic impact of the pandemic will likely continue to be felt in the rental markets, as those who can not find a home to buy will struggle. However, in cities with recent, acute declines in rental rates, Tucker doesn’t expect a long-term downturn.
“A lot of the things that made city living great– a short commute, the nightlife, the restaurants, the live entertainment– that's all been shut down, but it won't be shut down forever,” Tucker said. “So I think as employers bring employees back to their offices, this is probably a great opportunity for renters to get a good deal and really for home shoppers as well.”
And local real estate news coverages backs up what Tucker is saying, with real estate agents across the nation reporting strong sales going into 2021 — from Palm Beach, to Lincoln, to Springfield and even in high-end markets like Breckenridge, CO.
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New Treasury pick criticized for earning millions in speaking fees
2020 was a great year for the next, expected head of the Treasury, Janet Yellen. That’s because she disclosed in the New Year that the former head of the Federal Reserve earned $7 million in speaking fees in the last few years (WSJ paywall).
This drew criticism and questions of conflicts of interest, which is not uncommong to the role. For example, the outgoing Treasury Secretary Steven Mnuchin was nicknamed the “foreclosure king” for his time running OneWest, and also placed his former executive in key positions at the Treasury.
However, one thing seems certain; Yellen in the role of head of Treasury will not be bad for business, as was Mnuchin’s term.
“That’s because Yellen’s tenure as leader of the Federal Reserve, which lasted from January 2014 to February 
2018, was bountiful for business profits, job growth and investors in everything from municipals and triple-B-rated corporate bonds to utility stocks and the Dow Jones Industrial Average,” according to this piece in SummitDaily.
Coverage in Fox News listed a spokesperson from the incoming administration as defending Yellen’s earnings.
“Take a look at her record on enforcement – this is not someone who pulls punches when it comes to bad actors or bad behavior. You can expect she will bring the same high ethical standards and tough enforcement philosophy to Treasury,” the spokesperson continued. “In fact, she didn’t hesitate to tell some audiences that the rules governing their business should be tougher and more stringent – and it could create problems for the economy otherwise.”
That’s the latest for now, have a great week, everyone!
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