The mortgage industry is set for a banner year in 2021 as the US economy continues to recover from the coronavirus crisis, according to a new forecast.

In its latest report, the Mortgage Bankers Association predicted that purchase originations would continue their upward march next year, hitting a record $1.60 trillion in 2021. The outlook was 11.9% higher than the level forecasted for 2020.

Current low-rate conditions are also likely to continue through 2021, with the 30-year fixed-rate mortgage increasing slightly to an average 3.3% before rising to 3.6% in 2022 and to 4.1% in 2023. With mortgage rates hovering near 3%, the MBA forecast also called for a 624,000 unit spike in overall home sales, up from the 5,584,000 SAAR sales in 2020 to 6,208,000 in 2021.

While purchases are expected to grow, refinances are anticipated to slow in 2021 – down to $971 billion from the $1.97 trillion projected for 2020.

“The economy, labor market, and housing market have all seen meaningful rebounds since the onset of the pandemic, but there is still profound uncertainty,” MBA Chief Economist Mike Fratantoni said. “Additional waves of the virus could lead to further lockdowns and more job market instability.”

Despite health and financial ambiguity amid the pandemic, MBA’s economic forecast showed that the US economic recovery rolls on.

MBA predicted that the unemployment rate in the United States would decline from 8.1% in 2020 to 5.5% the following year. MBA also predicted improvement in real GDP growth, rising from -2.5% in 2020 to 3% in 2021.

“On the other hand, another pandemic-related stimulus package would result in faster economic growth and additional support for the housing market,” Said Frantoni, “albeit with slightly more upward pressure on mortgage rates.”