2020 was a year filled with challenges & victories, impacting each of us differently. Each year is different but 2020 has been filled with more change than normal. Unemployment was still above pre-pandemic levels, the country coming to terms with racial inequalities, not to mention the contended national election and the COVID-19 pandemic were a few of the challenges we faced. Contrary to all these challenges, the housing market emerged.
Thankful for Item #1: Booming Home Sales
As of Q4 2020, home buying activity was at its highest level since 2006. Existing home sales were 27% higher than one year earlier, new home sales were up by 32% and pending or contract signings jumped 20.5% annually. Mortgage applications were up 20% year over year. 72% of homes that sold in October 2020 were on the market for less than one month.
Thankful for Item #2: Record Low Mortgage Rates
Home buyers locked in at some of the lowest mortgage rates ever. 30-year fixed mortgage set a record low, averaging 2.72%. It is projected that mortgage rates will stay low in 2021, averaging 3.1%.
Thankful for Item #3: Seller Equity
Median existing home price, as of Q4 2020, was up by 16% from the previous year. 16.7 million homes in the US (28.3%) were considered “equity rich”. This means the owner has at least 50% equity in the home.
Thankful for Item #4: Technology
Due to social distancing, technology became essential in keeping real estate transactions moving. The average real estate transaction takes 181 steps from beginning to end. Realtors relied on virtual tours, videoconferencing and remote signing capabilities.
Thankful for Item #5: New Priorities
COVID-19 lead buyers to reevaluate their housing situation, size and even location. Buyers sought homes with more rooms, more square footage and more space (for a home office or gym). Larger homes were also desired to accommodate multigenerational living.
Thankful for Item #6: Affirmation of Realtor Value
88% of buyers and 89% of sellers used an agent to help with their home transaction. We are in uncharted waters with the pandemic so it is not surprising that buyers and sellers turned towards agents to help in their home buying and selling process.
Thankful (most of all) for Item #7: The Sanctity of Home
Nothing is more important than the safety of our homes, and everyone should have a chance to purchase their own.