FBetween very low mortgage rates and very high house prices, 2021 has seen a number of real estate records fall. The housing market has continually outperformed itself this year, appearing to set new records every month thanks to a home buying rush that began last year.
âThe real estate market in 2021 was a continuation of the strong momentum inherited from 2020. Mortgage rates hovering at near record highs fueled demand,â said Lawrence Yun, chief economist of the National Association of Realtors.
Low interest rates were not the only driver of the real estate market fire. As the country slowly emerged from COVID-19 lockdowns, buyers redefined âthe perfect homeâ and expanded their efforts to find it.
âThe pandemic and the flexibility of working from home have changed people’s desire for what is the right home – whether it’s a larger house with space for a home office or moving away from home. expensive areas to seek greater accessibility, âsays Yun. âThis change in preference has also fueled demand for housing. “
Home prices have hit new highs as buyers vie for a limited number of available homes. For homeowners however, it was a godsend with new highs in their home equity and record profits on sales.
As the year draws to a close, here are some of the new housing records set in 2021.
1. The rate of a 30-year mortgage has reached an anticipated low
The average rate on a 30-year fixed-rate mortgage hit a record low of 2.65% on Jan. 7, according to Freddie Mac.
The previous high of 2.66% was set two weeks earlier, on December 24, 2020. In fact, the January low capped an almost one-year streak of 16 new lows that began in March 2020, when the 30-year rate fell to 3.29. %. Since January, rates have increased but remain low. As of December 23, the current 30-year rate is 3.05%
Before the pandemic, the all-time low was 3.31%, set in 2012.
2. Inventories started the year low and stayed there
The year started with a record 1.04 million homes for sale. That was only a 1.9 month supply to pace with sales at the time. It was the lowest housing stock since NAR started tracking in 1999 and down from 1.07 million units in December 2020.
Since then, stocks have improved slightly, but are nowhere near the six-month supply considered healthy. At the end of November, the housing stock stood at just 1.1 million units, a 2.1 month supply.
3. The selling prices of houses appreciated like crazy
Annual home price growth hit a new high in October, increasing 18% year-on-year, according to housing data provider CoreLogic. This is the greatest room for growth in the 45 years CoreLogic has tracked.
Although October data is the most recent information available, there are signs that price growth may slow. Month-over-month price growth has declined since peaking in April.
4. Higher prices meant larger loans
Purchase loan origins on track to hit $ 1.61 trillion by the end of 2021, up from the previous record of $ 1.51 trillion set in 2005, Mortgage Bankers say Association. This new record is due to the high demand for housing and the increase in prices caused by fierce competition.
The average dollar amount of purchase loans also set a new record. The record high of $ 418,000 was reached in February, according to the MBA. Since then, loan amounts have eased somewhat. During the week ending December 17, the average loan amount was $ 416,200.
5. Salespeople demanded more money than everâ¦
The median list price hit a record high of $ 385,000 in June, breaking the previous record of $ 380,000 set in May, according to Realtor.com. It was the fifth consecutive month of record asking prices.
Since this mid-summer peak, things have cooled slightly. The median listing price has declined and currently stands at $ 379,000. Before the pandemic, the record was $ 325,000 set in June 2019.
6 & 7â¦ and buyers delivered
The median selling price of existing homes also hit a new high in June, hitting $ 362,800, according to NAR. In November, prices were $ 353,900, a record for the month.
Home sellers reaped the benefits of a hot housing market, as profit margins – the percentage change between a home’s median purchase price and its resale price – rose 48%. This is the highest rate since 2012.
According to real estate data provider ATTOM, that translates to an average profit of $ 100,178 on the sale of a typical home in the third quarter of 2021. The previous high was $ 88,800 in the previous quarter.
8. Homeowners have earned more equity in their home than they know what to do with it.
The price hike led to a record $ 9.4 trillion in exploitable equity in the third quarter, according to real estate data firm Black Knight. Actionable equity is the amount of money a homeowner could access from their home while still maintaining 20% ââequity.
The previous record was $ 9,100 billion earned in the second quarter of this year. Relative to the pre-bubble market, exploitable equity is almost 90% higher than in 2006.
9. Homes sold at lightning speed
Competition for the small number of available homes peaked in the 4-week period ending April 4, when 61.5% of contract homes received an accepted offer in two weeks, the fastest pace since Redfin started tracking in 2012. Forty-six percent of homes had an offer accepted within a week.
Since then, the buying frenzy has cooled somewhat. For the four-week period ending December 12, 42% of homes under contract had an offer accepted within two weeks and 36% had an offer accepted within one week.
10. The rent was “too high”
Rental prices have seen double-digit year-over-year growth over the past five months, according to Realtor.com. The median rental price in the largest metropolitan areas rose to $ 1,771 per month in November, up 19.7% from November 2020 and the highest price recorded since Realtor.com started tracking rents in 2019.
This means that tenants pay an average of $ 291 more per month in rent than a year ago. The largest increase is in 2-bedroom units, with the median price of a 2-bedroom rising to $ 1,993, or $ 330 more per month.
11. Foreign investors have stayed away
Pandemic lockdowns and restricted travel have reduced foreign investment in the U.S. housing market. The number of homes purchased and the amount spent by international buyers hit new lows in the 12-month period ending March 2021, according to the National Association of Realtors.
Foreign investors bought a total of 107,000 homes and spent $ 54.4 billion on real estate purchases, the lowest totals since 2011, when investors bought 210,800 properties and spent $ 66.4 billion.
Every Saturday, Money’s real estate writer Sam Sharf delves into the world of real estate, offering a fresh take on the latest housing news for homeowners, buyers and dreamers.
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