2020 Existing-Home Sales Reach Highest Point in 14 Years

Existing home sales for 2020 hit their highest level since 2006 as more Americans sought larger living spaces as they adopted work-from-home policies in the wake of the coronavirus pandemic. coronavirus.

Existing home sales, which include transactions for single-family homes, townhouses, condominiums and co-ops, were up 22.2% year-over-year, according to the National Association of Realtors (NAR). .December home sales rose 0.7% from November to a seasonally adjusted annual rate of 6.76 million.

“Home sales rose in December, and for all of 2020 we saw sales hit their highest levels since 2006, despite the pandemic,” said NAR chief economist Lawrence Yun. “What’s even better is that this momentum should continue into the new year, with more buyers expected to enter the market.”

The NAR expects strong activity to continue into 2021 as mortgage rates hover near record lows at around 3% and economic conditions hopefully improve with additional stimulus and the distribution of vaccines.

An unequal distribution

The U.S. housing market highlighted the growing disparity between high- and low-income Americans, exacerbated by COVID-19, as owners of homes worth more than $100,000 welcomed a vibrant seller’s market, while owners of less expensive homes saw their sales decline.

The stark contrast between high-income and low-income Americans reinforces the idea that the United States will experience a K-shaped recovery as its economy recovers from the effects of COVID-19. Nearly 8% of homeowners, or 10 million people, said they had not caught up on their mortgage payments at the end of December, while almost 4% said they were not confident in their ability to make the payment next month’s mortgage, according to the US Census Bureau.

Under the proposal of President Joe Biden $1.9 trillion stimulus packagethe current moratoriums on evictions and foreclosures, which are due to end in March, will continue until September.

A booming housing market

The end of 2020 saw fewer homes on the market as individuals quickly bought homes in a hurry to leave the cities for the suburbs. Total housing inventory at the end of December stood at 1.07 million units, down 16.4% from November and 23% from the same period in 2019, NAR said.

Properties generally stayed on the market for just 21 days in December, almost half the time they were on the market in December 2019, and 70% of properties sold in December 2020 remained on the market for less than a month.

First-time buyers made 31% of sales in December, while individual investors or second home buyers, who account for many cash sales, bought 14% of homes in December.

The median existing home price for all housing types in December was $309,800, up 12.9% from the same time last year as prices rose in all regions of the country. The West was the most expensive region, with a median home price of $467,900, while the Midwest was the least expensive region with a median price of $235,700, NAR said.

Home builders and home improvement retailers have benefited from the enthusiasm of homebuyers. Shares of construction companies PulteGroup, KB Home and Toll Brothers have jumped 58%, 80% and 87%, respectively, since mid-March when the pandemic hit the United States.

“To their credit, homebuilders and construction companies stepped up their construction efforts, with housing starts hitting an annual rate of nearly 1.7 million in December, with a greater focus on single-family homes” , Yun said. “However, it will take vigorous new home construction in 2021 and 2022 to adequately supply the market to properly meet demand.”