HousingWire Lead Analyst Logan Mohtashami discusses his recent article, which explains what factors are likely to drive mortgage rates next year. According to Mohtashami, the number of COVID-19 cases in the U.S. as well as the results of the 2020 presidential election will play a pivotal role in determining the way the economy moves, which will have a dramatic impact on mortgage rates in 2021.

From Logan’s article:

“I’ve seen a number of articles lately predicting that mortgage rates will rise in 2021, a couple even from other HousingWire contributors. The rationale for these predictions have been erudite, multifactorial and complex. I am, on the other hand, a simple man. Most days I don’t even wear shoes. When I think about the direction of mortgage rates there is only one factor I consider – and that is economic growth.

Over the years I have professed that the rate of economic growth pretty much explains the whole lasagna so that should be the entire focus. When the economy gets better, bond yields rise and mortgage rates follow. When the economy slows, bond yields drop and mortgage rates follow. I expect mortgage rates in 2021 to stick to the same pattern.”

Logan looks at three economic factors that will have an impact:

1. COVID infection rates
2. The election
3. Further economic stimulus