We anticipate sales to grow 7 percent and costs to increase another 5. 7 percent on top of 2020's already high levels. While we anticipate home loan rates to tick up slowly, sales and rate growth will be propelled by still strong need, a recuperating economy, and still low home loan rates.
While more youthful Millennial and Gen-Z purchasers are expected to play a growing role in the housing 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 down payment cost savings. Although supply is anticipated to lag, we do expect the decreases to slow and potentially visit the end of the year as sellers grow more comfy with the marketplace environment and new building and construction picks up.
On the whole, the marketplace will remain seller-friendly, however purchasers will still have reasonably low home mortgage rates and an eventually improving selection of homes for sale. With house builder self-confidence near record highs, we expect continued gains for single-family construction, albeit at a lower growth rate than in 2019. Some slowing down of new home sales growth will occur due to the reality that a growing share of sales has actually come from homes that have not started building and construction.
However supply-side headwinds will continue. Residential building and construction continues to deal with restricting factors, consisting of greater costs and longer delivery times for structure products, an ongoing labor abilities shortage, and issues over regulatory cost concerns. For home building, we will see some weakness for multifamily rental advancement particularly in high-density markets, while redesigning need must stay strong and broaden further.
We're exiting 2020 with a variety of characteristics that will more than likely keep this insane real estate market going. There is extremely low stock, with less than 500,000 homes for sale, home loan rates are at 50-year lows, and there's no indication yet of distressed sellers from the economic crisis coming out.
Inventory and rates must ease a bit click here in the 2nd half of the year, and larger economic headwinds might begin appearing. Till then, buyers must beware and sellers joyous. While 2020 did not surprise with its fair share of surprises, 2021 might still have more surprises in store for us.
Real Estate Market 2021
Initially, rates of interest, which have inspired lots of purchasers in 2020, are expected to remain low and will help ameliorate some of the affordability concerns arising from fast home price appreciation seen in 2020. Simply put, low home loan rates continue to provide greater purchasing power, specifically for newbie house buyers.
However likewise, the oldest Millennials are increasingly adding 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 brand-new construction.
Asian American families saw the most significant earnings 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% nationwide 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 earnings disparity within our neighborhood. While a lot of Asian American families are experiencing income growth, we've also been hit hard with the pandemic with small companies closing and tasks lost due to Covid-19.
They are also altering housing choices, for example, seeking more space. Combined with record-low home mortgage rates and forbearance programs, odds are the real estate market will remain strong, however it is not a foregone conclusion. There is still substantial danger to the downside if economic normalization coming out of the pandemic is botched or significantly postponed.