2020 Ended With Homes Sales off the Charts

COVID-19 brought a global pandemic and high unemployment in the year 2020 but that has not stopped Americans from purchasing homes. In fact, people are still buying homes at the fastest rate in years.

According to the National Association of Realtors, homes sale were at their highest pace in 14 years in October 2020. Homes sold at a swift pace in October, with more than 7 in 10 homes sold on the market for less than a month.

“Considering that we remain in a period of stubbornly high unemployment relative to pre-pandemic levels, the housing sector has performed remarkably well this year,” said Lawrence Yun, NAR’s chief economist.

This has caused a record low in home inventory. If the pace keeps up with the current rate of sales, it will only take 2.5 months to clear all existing inventory. Existing inventory includes single-family homes, townhomes, condominiums and co-ops. Sales of existing homes were up 26.6% from a year ago in October. This was a seasonally adjusted annual rate of 6.85 million.

“We see home sales continuing to grow at a strong pace through the remainder of 2020 and into 2021,” said Ruben Gonzalez, chief economist at real estate firm Keller Williams. “Record-low interest rates have continued to bolster demand, however, supply shortages remain a limiting factor and are continuing to put pressure on home prices.”

The inventory of available homes and the influx of luxury homes sold has made the median home price go up to a record $313,000. This is almost 16% more than a year from October 2020. Across the country, the sales price for homes sold between $750,000 and $1 million were up 80% from this time last year. Homes sold over $1 million have more than doubled since last year.

“The continued surge in home buying shows not only catch-up sales from earlier in the year when shutdowns dampened real estate activity, but the strength of interest from buyers combined with the opportunity afforded by still record-low mortgage rates,” said Danielle Hale, Realtor.com chief economist.

“With news that a Covid-19 vaccine will soon be available, and with mortgage rates projected to hover around 3% in 2021, I expect the market’s growth to continue into 2021.”

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