Fitch Ratings has just released its Global Housing and Mortgage Outlook – 2021, which forecasts that home prices will be mostly stable in 2021 for the countries covered in its report.

The firm expects national home price growth for next year to be from -3% to +3% in nine of the 16 countries it covers in its Outlook. The report states: ‘We expect home prices in the US to rise by between 1% and 3% next year as existing supply will fail to meet higher demand with mortgage rates near historic lows. Price growth in the US is likely to be near the higher end of the range if public policy supports consumers by means of further payment holidays and foreclosure moratoriums, while it could be lower if unemployment rates increase during a renewed wave of the coronavirus pandemic without a commensurate government response.’

Fitch sees market fundamentals leading to a greater risk of home price falls in Spain and the UK with forecasted drops of 4-6% in each country with lower but notable price drops also expected in Canada and Ireland.

Fitch forecasts the highest home price growth in 2021 in Australia (3-5%). Globally, despite the large hit to the economy and disruption in daily life from the pandemic, government support for workers and borrowers, low policy rates, quantitative easing (QE) and a strong lending offer from well-capitalised banks have supported home prices in 2020.

The report states: ‘We believe that home prices will be flat or will grow in nearly all of the countries in this report for 2020. High unemployment levels, the contraction in personal income for those on hourly wages, temporary workers and the self-employed, and uncertainty on the length of coronavirus restrictions will weigh on home prices in 2021.