Low interest rates and high demand are leading to record sales amidst steadily rising prices.

To put it mildly, we have seen a quite interesting housing market through the pandemic. During most recessions, falling incomes and tighter guidelines cause the housing market to slow and lead to stable or lower housing prices. During the Great Recession, it took almost a decade for the housing market to recover.

No such thing happened during this recession. Interest rates moved to record lows and housing sales increased. Demand has been so high that prices have risen dramatically. The only parallel to previous recessions is the fact that lenders did tighten up on their guidelines for certain types of financing.  Today we ask -- as the economy gets stronger, will lenders continue to loosen these guidelines, providing even more momentum for the markets?

Keep in mind that the change in administrations also has brought new regulators to the housing agencies --- Fannie Mae, Freddie Mac and FHA.  Their focus upon fair lending may cause a move towards more lenient guidelines and/or programs especially targeted to low-to-moderate income first-time buyers.  But as the economy get stronger, it is also expected that interest rates will rise, which also may negatively affect affordability. These are important factors to watch for within the housing market as 2021 progresses.