Low-interest rates, a limited supply of inventory and “renewed appreciation for the home as a sanctuary” have combined to push home prices up for some builders, creating a surprisingly hot housing market as the first year of the coronavirus pandemic draws to a close.

The housing market has been a bright spot in the economy while other areas such as restaurants and commercial real estate continue to struggle amid stay-at-home orders and economic shutdowns.

Pennsylvania-based home construction company Toll Brothers reported 3,407 net signed housing contracts in the fourth quarter with a value of $2.74 billion. It was “the highest totals for any quarter in our history,” Toll Brothers CEO Douglas C. Yearley said in a Barrons report.

The company specializes in luxury homes averaging $780,000 to $810,000. In 2020, it was the eighth-largest U.S. home builder based on the number of homes closed.

“We are currently experiencing the strongest housing market I have seen in my 30 years at Toll Brothers and we continue to increase prices in nearly all of our communities as we focus on driving profitability and managing growth,” Yearley said in a press release. He attributed the market strength in part to a “renewed appreciation for the home as a sanctuary,” and the flexibility working from home provides to home buyers.

If more homes are put up for sale, the housing market could get even hotter, the CEO of real estate brokerage Redfin told CNBC.

“Today, we are definitely inventory-constrained. There aren’t enough homes for people to buy,” Redfin CEO Glenn Kelman told CNBC. “If we see people get more comfortable letting others into their home, we’re going to see more inventory on the market, and that’s what will drive sales volume.”

Despite the overall U.S. homeownership rate rising in recent years, homeownership among Black households is stubbornly low. Houses are underpriced in majority-Black neighborhoods, a process called “devaluation,” according to Andre M. Perry, a fellow at the Brookings Institution’s Metropolitan Policy Program and scholar-in-residence at American University.

Racism contributes to the devaluation of assets including homes in majority-Black cities, Perry said in a Wall Street Journal interview.

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Some homeowners got mortgage forbearance through government fiscal stimulus to prevent foreclosure during unprecedented layoffs. Job losses hit a record high of 18.1 million in April, according to the U.S. Bureau of Labor Statistics. Fannie Mae and Freddie Mac put forbearance plans in place to help with loss mitigation. However, those forbearance programs are coming to an end and the future is unclear in 2021, Housing Wire reported. Many jobs have not returned and some experts worry about foreclosure rates rising in 2021. 

Redfin reported a total revenue increase of 17.4 percent for the first nine months of 2020 compared with the same period in 2019. Redfin’s stock is up more than 400 percent since its March low, CNBC reported. The iShares U.S. Home Construction ETF is up more than 125 percet since March.

“Every week I think it can’t get crazier, it gets crazier,” Kelman said, describing the housing market. It won’t last forever, he acknowledged. “(Mortgage) rates are below 3 percent. That can’t last forever, but we think it can last through 2021.”

Despite the optimism, builder stocks have had a bumpy ride in the sector, Barrons reported. Many rose to new highs early in the fall, only to come under pressure as rising yields on Treasury debt led to concern that mortgages will become more expensive.

Most builders’ stocks were trading lower Tuesday morning, but Toll Brothers was hit harder hit than most with a loss of 7.3 percent.

U.S. housing prices have been rising much faster than overall inflation, wages and rent — exactly what happened leading up to the last housing bubble of 2007-2008. A correction is inevitable, economic analyst Jesse Colombo predicted in a March 2020 Forbes report.