It’s been one year since the coronavirus pandemic disrupted the U.S. housing market. Since then, though, residential real estate remained resilient as record-low mortgage rates drove growth in home sales.

However, COVID-19 also created a seller’s market in 2020. A seller’s market is when housing demand exceeds the supply of housing inventory while a buyer’s market is the exact opposite — the housing inventory supply is higher than the demand. In a competitive real estate market, buyers often need to make an offer above the listing price, and bidding wars are common. The biggest downside of the hot real estate market in 2020 was rapid home price appreciation.

As we begin to see a light at the end of the tunnel with more vaccinations reaching American arms, it has many wondering what’s in store for this year's housing market. If you’re considering buying a home, Credible can help you ​compare multiple mortgage lenders​ at once in just a few minutes. Use Credible’s online tools and get prequalified today.

Will home prices fall in 2021?

When shutdowns began in early 2020, it seemed many Americans opted to leave densely packed metropolitan areas like New York City and San Francisco in favor of suburbia. This urban exodus was fueled by remote working making it easier to leave big cities and job loss forcing many to expand their search out of state.

According to CoreLogic’s home price index, home prices increased by 9.2% year-over-year in December 2020, the highest annual gain since February 2014. Meanwhile, Realtor.com's housing market forecast for 2021 is that sellers will continue to get top dollar as home prices stay high, making affordability for buyers a challenge. You can use a mortgage calculator to estimate potential monthly payments and check out personalized prequalified mortgage rates by visiting Credible.

The National Association of Realtors estimates annual median home prices to increase by 8.0% in 2021 and by 5.5% in 2022. Right now, it’s better to be a seller than a buyer.

“Home prices are growing monthly right now,” says Chuck Belden of Hunter Rowe Real Estate. “There’s no sign that I see of this switching to a buyer’s market anytime soon.”

If you're planning a home purchase, you can visit a multi-lender marketplace like Credible to see if you qualify for a mortgage based on your current credit score and salary.