Even amid a global pandemic and high unemployment, people are still buying homes at the fastest rate in years.
Home sales rose again in October, at their highest pace in 14 years, according to the National Association of Realtors.
But a record low inventory of available homes and a greater number of luxury homes sold have pushed the median home price up to a record $313,000, almost 16% more than a year ago. Total housing inventory dropped 3% from September and is down nearly 20% from a year ago.
Homes sold at a swift pace in October, with more than 7 in 10 homes sold on the market for less than a month. At the current pace of sales, it would take just 2.5 months to clear the existing inventory — a record low.
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Sales of existing homes — which include single-family homes, townhomes, condominiums and co-ops — were up 4.3% from September and 26.6% from a year ago, to a seasonally adjusted annual rate of 6.85 million in October.
“Considering that we remain in a period of stubbornly high unemployment relative to pre-pandemic levels, the housing sector has performed remarkably well this year,” said Lawrence Yun, NAR’s chief economist.
While coronavirus-induced shutdowns hindered virtually all markets, Yun says the housing industry has mounted an impressive rebound.
“We see home sales continuing to grow at a strong pace through the remainder of 2020 and into 2021,” said Ruben Gonzalez, chief economist at real estate firm Keller Williams. “Record-low interest rates have continued to bolster demand, however, supply shortages remain a limiting factor and are continuing to put pressure on home prices.”
While fewer homes have sold this year over last year at the lowest end of the market because of lack of inventory, sales at the high end are significantly above a year ago, pushing the median price of all homes up.
Nationally, homes sold between $750,000 and $1 million are up 80% from a year ago and those $1 million and over have more than doubled.
“The continued surge in home buying shows not only catch-up sales from earlier in the year when shutdowns dampened real estate activity, but the strength of interest from buyers combined with the opportunity afforded by still record-low mortgage rates,” said Danielle Hale, Realtor.com chief economist.
Yun anticipates this to continue.
“With news that a Covid-19 vaccine will soon be available, and with mortgage rates projected to hover around 3% in 2021, I expect the market’s growth to continue into 2021.”