Today the National Association of Realtors reported existing home sales for the month of December were at 6,760,000, a beat of estimates. This also closed the books on 2020’s housing market as we finished out the year at 5,640,000 total existing-home sales — a 5.6% increase from the same month in 2019.
And with that news, came a huge expectation from Zillow. The company is forecasting that in 2021, nearly 6.9 million closed existing home sales could happen. That’s the most since 2005 and the biggest one-year gain in sales (21.9%) since 1983.
With 2020 ending hot and 2021 shaping up to be a great year, we are entering a period where we have the best housing demographics ever combined with mortgage rates low enough to keep housing stable for years to come.
It is a seller’s market around the country. Housing inventory is at all-time lows of 1.9 months. And compared to previous years, days on market fell dramatically from 41 days to 21 days. Cash buyers and sales to investors also fell to the same month of the previous year. But mortgage demand picked up by the end of 2020. This means first-time and move-up buyers are making moves and able to secure a place, but not without a lot of competition.
On top of that, forbearance numbers continue to decline. Fannie Mae and Freddie Mac say their rate of forbearance is at 3.11%. Ginnie Mae is at 7.61%. There are now 2.7 million Americans in some form of forbearance.
As vaccines roll out and our world opens back up, it will be interesting to see how the economy and the markets react. If you are thinking about buying or refinancing, now is the time. These low rates are here now but they won’t be here forever. It’s time to make your move.
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