- Existing home sales up +5.9% from year before, according to National Association of REALTORS®
- Sales hit highest level since 2006
- Prices increased +12.9% y/y
- New home construction also hit 2006 levels
Housing Market Soared in 2020
2020 was quite a year all the way around…a global pandemic, a Depression-level imploding job market, racial and political upheaval…and through it all the US housing market not only bounced back…it soared.
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Look at the Data
Existing home sales increased +5.9% from one year before. 5.64M existing homes were sold, the highest number since 2006, according to latest data from the National Association of REALTORS® (NAR). In the one month from November to December, total existing home sales finished up +0.7% to hit an astounding increase of +22.2% over December 2019’s total existing home sales.
Sales Performed at Highest Level since 2006
Lawrence Yun, chief economist with NAR, said, “Home sales rose in December, and for 2020 as a whole, we saw sales perform at their highest levels since 2006, despite the pandemic. What’s even better is that this momentum is likely to carry into the new year, with more buyers expected to enter the market.”
New Home Construction +8% for year and +15.9% from previous month
Simultaneously, new home construction also hit 2006 levels with completions up +8% for the year and +15.9% from the previous month in December. Authorized building permits increased a whopping +17.3% y/y and +4.5% m/m, according to latest data from the US Census Bureauand the US Department of Housing and Urban Development (HUD). Housing starts for single-family homes were up +5.2% y/y and 5.8% m/m to hit an increase of +12% m/m.
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Though Yun cautioned reserve in his exuberance concerning new home construction by noting that housing supply in the US continues to be much behind demand, he said, “Home construction finished the year with the biggest bang since 2006 with 1.669M units started for construction in December (annualized). That means the worst of the housing shortage could soon come to an end.”
Prices Soared +9.5% y/y
To cap off the year, November home prices soared as well to +9.5%, according to S&P CoreLogic Case-Shiller Home Price Indices. This is the strongest annual home price growth rate in over six years and ranks as one of the biggest annual home price gains in the history of the index.
According to Craig Lazzara, managing director and global head of index investment strategy with S&P Dow Jones Indices,“Recent data are consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes.” Also include historically low interest rates with the pandemic-inspired motivation for homeownership.
Leaders of Pack in Price Appreciation
Phoenix, Seattle and San Diego continued to lead the pack by showing the strongest price appreciation of all major markets in November.
Thanks to Inman and CNBC.
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