We expect sales to grow 7 percent and rates to increase another 5. 7 percent on top of 2020's already high levels. While we anticipate home mortgage rates to tick up gradually, sales and price development will be propelled by still strong demand, a recuperating economy, and still low home mortgage rates.
While younger Millennial and Gen-Z purchasers are anticipated to play a growing role in the real estate market, fast-rising prices will develop a bigger barrier to entry for the many newbie buyers in these generations who do not have existing home equity to tap for deposit savings. Although supply is anticipated to lag, we do expect the decreases to slow and potentially drop in the end of the year as sellers grow more comfy with the market environment and brand-new building gets.
On the whole, the marketplace will remain seller-friendly, however purchasers will still have fairly low home mortgage rates and an eventually enhancing selection of homes for sale. With house builder self-confidence near record highs, we anticipate continued gains for single-family building and construction, albeit at a lower growth rate than in 2019. Some slowing of brand-new home sales growth will take place due to the fact that a growing share of sales has actually originated from homes that have not begun construction.
But supply-side headwinds will continue. Residential building and construction continues to face limiting aspects, including higher costs and longer shipment times for building materials, a continuous labor skills shortage, and concerns over regulative expense burdens. For house building and construction, we will see some weak point for multifamily rental development particularly in high-density markets, while renovating need needs to stay strong and broaden further.
We're exiting 2020 with a variety of characteristics that will more than likely keep this crazy housing market going. There is incredibly low inventory, with less than 500,000 houses for sale, home mortgage rates are at 50-year lows, and there's no sign yet of distressed sellers from the recession coming out.
Inventory and prices need to ease a bit in the second half of the year, and bigger financial headwinds could start showing up. Until then, buyers should beware and sellers pleased. While 2020 did not surprise with its fair share of surprises, 2021 could still have more surprises in store for us.
Housing Market 2021
Initially, rate of interest, which have motivated lots of buyers in 2020, are expected to remain low and will help ameliorate some of the price issues arising from fast home price gratitude seen in 2020. To put it simply, low home loan rates continue to offer greater purchasing power, especially for newbie house buyers.
But likewise, the oldest Millennials are increasingly contributing to the trade-up market. As an outcome, 2021 home sales activity is expected to stay strong and exceed 2020 levels. Third, inventory levels are most likely to see some enhancement, partially from sellers who have actually been on the sidelines, partly from distressed homeowners, and partly from more new construction.
Asian American families saw the most significant income development of any racial or ethnic group in the United States over the past years and a half practically 8% compared to a 2. 3% national average. Education definitely is a major factor to this growth with more than 54% of Asian Americans having a bachelor's degree compared to the nationwide average of 32%.
States like North Carolina, Alabama and Texas are seeing an increase in net migration of Asian Americans. Although this is excellent news entirely, let's not forget that there's an income variation within our community. While a great deal of Asian American households are experiencing earnings development, we've likewise been struck hard with the pandemic with small companies closing and jobs lost due to Covid-19.
They are likewise changing real estate preferences, for instance, looking for more space. Integrated with record-low mortgage rates and forbearance programs, chances are the real estate market will remain strong, however it is not a foregone conclusion. There is still considerable threat to the drawback if financial normalization coming out of the pandemic is botched or considerably click here postponed.