A look back on the last two years...

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As we think about the season ahead, it’s good to reflect on the real estate market over the past two years. We’ve seen some surprising trends and quite a wild ride for the market! Very favorable interest rates drove house sales over the past few years. Sky-high home prices added an interesting twist too. And COVID-19 also affected the sales market. As the country began to open again, people had a new idea about what was their ideal house. Working from home and the desire for more living space was a new need. Moving to a less expensive area was another consideration. I’m sure that you’ve also seen surprising or unexpected situations too.

I thought it might be interesting to look at some information about housing records that were set in 2021. Here are a few facts from Money magazine.

 

  1.  Fixed 30-year mortgage rates hit a record low.

 

On January 7, 2021, the 30-year fixed-rate mortgage dropped to an all-time low of 2.65%. Before the pandemic, the all-time low was 3.31%, which was set in 2012. According to Freddie Mac, 30-year fixed-rate mortgage averages moved to 4.67% as of 3/31/2022. The trend is expected to continue.

 

  1.  Home inventories started low and didn’t improve

 

January 2021 started with a record low of 1.04 million homes for sale. The month before the number of available homes was at 1.07 million. Houses were selling but houses were not listed quickly enough to close the gap. This was also a time when the COVID-19 pandemic was escalating. Home inventory slowly improved through the year. By the end of 2021, around 1.1 million homes were for sale. Still less than a healthy market but improving. 

 

  1.  Home sale prices went through the roof

 

By October of 2021, home prices reached a new high. Sellers asked for high sale prices and were often able to get their price or more due to the housing shortage. Home sale prices are beginning to drop as more homes are listed.

 

  1.  Higher prices = bigger loans

 

Average home loan amounts for the country reached an all-time high of $418,00 in 2021. Nationally, home loans were on track to reach $1.6 trillion by the end of 2021. The previous national record was set in 2005 and was $1.51 trillion. By the end of December 2021, the average loan amount had dropped to $416,200.

 

  1.  Homes sold very quickly

 

Homes were selling quickly early in 2021. In April 2021, 46% of homes for sale had an accepted offer within one week. Most homes had an accepted offer within two weeks of listing! As the market started to cool near the end of 2021, 42% of homes under contract had an offer accepted in two weeks. 36% of homes had an accepted offer in one week.

 

  1.  Rent continues to rise

 

As other expenses have increased, so has the cost of renting housing. Rental housing rates have increased by an average of 19.7% from November 2020 to the same time in 2021. This means that renters are paying an average of $291 more per month than they were a year ago.

 

  1.  Foreign investors

 

The US housing market felt the effect of the pandemic in another way as well. Travel restrictions limited the number of foreign investors purchasing homes in the US. Foreign investors purchased a total of 107,000 homes and spent $54.4 billion in real estate purchases. This is the lowest since 2011.

 

According to recent reports, the real estate market is settling down. Hopefully, we will see more home listings as the year progresses. And hopefully, the interest rates will remain low to help our home buyers.

 

We’re here to help you in any way we can. Don’t hesitate to give us a call!