The pandemic may have slowed real estate deals at the start of the year, but six months in, home sales have surged.
Sales for existing homes reached a 14-year high in August, according to a report from the National Association of Realtors. Those sales — which include single-family homes, townhomes, condominiums and co-ops — rose 10.5 percent from August 2019 to a seasonally adjusted rate of 6 million homes per year.
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Incentivized by record-low mortgage rates, Americans have rushed to buy new and existing real estate. This week, the Mortgage Bankers Association reported a 25 percent year-over-year increase in the weekly volume of purchase loan applications it tracks.
“Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3 percent and with continued job recovery,” said Lawrence Yun, NAR’s chief economist.
But the housing market could face headwinds in December when the federal eviction moratorium ends, leading to a number of homes being foreclosed upon.
There’s also the issue of supply and demand: Builders are struggling to keep up with potential buyers’ interest in new and existing homes. Meanwhile, total housing inventory at the end of August was 1.49 million units, down 18.6 percent from one year ago.
“Housing demand is robust but supply is not, and this imbalance will inevitably harm affordability and hinder ownership opportunities,” Yun said in a statement.
Prices are already going up. Last month, the median existing home price rose 11.4 percent to $310,600, up from $278,800 in August 2019, according to NAR.
That trend was seen at a regional level, too: In the Northeast, existing median sales jumped 13.8 percent to an annual rate of 740,000, a 5.7 percent increase from a year ago.
The median home price in the Northeast was $349,500, up 10.4 percent from August 2019.
Because lenders are not able to file foreclosures, there have so far been few distressed deals.
Distressed sales, or foreclosures and short sales, represented less than 1 percent of sales in August, down from 2 percent at the same time last year.