It’s been almost exactly a year since the federal interest rate dropped to practically zero, a move that bolstered the residential real estate market and triggered a tidal wave of refinances. While the slashed rate may not have protected every sector of the economy, it did successfully stave off another housing crash and helped make home sales one of the few economic bright spots of the pandemic.

That record volume of refis was good for a lot of things, and home sales was just one of them. The drop in rates not only opened up the market at a time when buyers are more inclined to wait for the economy to improve, but it also freed up spending for a lot of homeowners who didn’t anticipate this sudden influx of cash. Many of those homeowners, who suddenly had several hundred dollars at their disposal, were working remotely for the first time, and the savings from their refis freed up the funds necessary to remodel for home offices. Others seized on historically low interest rates to buy investment properties and vacation homes away from metro areas.

The increased competition in the residential market and ever-tightening housing inventory have driven up prices and sparked bidding wars that have made it harder for first-time buyers to enter the market. And when those new buyers do get into the market these days, they more frequently opt for short-term loans and smaller down payments.

Will these and other trends continue through the end of the year and into 2022? Could another round of refis be in the works as vaccines gradually reduce the spread of COVID? We spoke with these Chicagoland mortgage lenders to get their take on the biggest year on record and what the future holds for the remainder of 2021. We’re not ready to stop the conversation there. Let us know your thoughts on refis, mortgage lending or any other topic of interest to real estate professionals by contacting me at Tim.Inklebarger@agentpublishing.com.