Key Highlights

  • Lawrence Yun, chief economist of National Association of REALTORS® (NAR), said surging 2020 housing market not likely to let up into winter
  • Yun spoke at NAR’s 2020 REALTORS® Conference & Expo in mid/late November

In light of the Covid-19 pandemic, high unemployment and an economic recession, “2020 has been a year of surprises,” said Lawrence Yun at the National Association of REALTORS® Conference & Expo during its “Residential Economic Issues & Trends Forum.”

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Take a look at some of these “surprising” statistics:

  • September’s existing home sales increased nearly +21% higher than one year ago
  • New home sales increased +32% compared to one year ago
  • September’s pending home sales and/or contract signings increased +20.5%

With such a surging housing market, Yun predicted, “This winter may be one of the best winters for sales activity…on a winter-to-winter comparison, this could be one of the best breakout years just based on the fact that pending contracts are at such a higher level.”

Both mortgage applications and home prices in September were up. Mortgage applications increased +20% y/y; the median existing home prices for all housing types was $311,800, an increase of +14.8% compared with last year at this same time.

Here are some of Yun’s predictions concerning the 2021 housing market:

  • Mortgage rates: 3.1% (3% for 2020)
  • New home sales: +23% (20% for 2020)
  • Existing home sales: +9% (+3% for 2020)
  • Home prices: +3% (+6% 2020)
  • GDP growth: +4% (-5% for 2020)
  • Job gains: +3M (-7M for 2020)
  • 10-year treasury: 1% (0.9% for 2020)
  • Consumer price inflation: 1.5% (1% for 2020)

Here are some of Yun’s thoughts concerning 2021:

  • Thinks mortgage rates to stay low into 2021
  • Dependent upon a vaccine, economy likely to continue steady recovery despite state-to-state variations AND economy still missing 10M jobs lost in pandemic
  • Personal incomes of many buoyed by stimulus checks, unemployment benefits and small business loans and personal savings elevated…”unleashed spending” may happen when vaccine comes
  • Due to historic inventory shortages, Yun said, “Any foreclosure increases will likely be quickly absorbed by the market. It will not lead to any price declines.”
  • Housing shortages will persist
  • Work-from-home trends driving housing preferences
    • According to NAR’s 2020 Profile of Home Buyers and Sellers, 47% of clients interested in moving to suburbs or subdivision
    • 39% interested in relocating to rural area
    • 14% interested in moving to urban area or central city.

 

Thanks to the National Association of REALTORS® and REALTOR Magazine.

Also read: Home at Risk of Wildfire? Ask These Questions, September Set Records for Price, Sales, New Listings & Speed, Q3 2020 Earnings for Sotheby’s, RE/MAX & Keller Williams