US home sales highest in 15 years

 US home sales highest in 15 years

In 2021, low interest rates and high demand helped drive US home sales to a 15-year high.

The National Association of Realtors (NAR) has just said, US existing home sales will reach 6.12 million units in 2021, an increase of 8.5% compared to 2020. This is the highest level in the past 15 years.

Homes are also selling faster than ever. Many homeowners switch hands within a week of listing, forcing buyers to make quick decisions. Low home loan interest rates have increased demand among all audiences, including first-time home owners, luxury vacation home buyers and investors.

Besides, many households have saved more during the pandemic and benefited from the rising stock market. Demand for housing is also growing as more people can now work remotely. Millennials are also entering their early and mid-30s, the time to start buying a home.

A house for sale in New Mexico, USA this month. Photo: Zuma Press

A house for sale in New Mexico, USA this month. Photo: Zuma Press

All of these factors continue to be strong drivers for 2022. "I think the housing market in the first quarter of the year will continue to be 'crazy.' Many buyers are feeling the urgency," said Jeff Tucker. , said senior economist at Zillow Group.

Shevene Cole, who recently bought a new home near Denver, is one of them. "I know interest rates are going up. So I have to act fast," she said. Shevene Cole previously set her sights on a three-bedroom, two-bathroom and two-car garage for under $450,000.

In November, she sold her old home for $323,000 and found a new one last month on schedule, for $442,000. "I'm really lucky. It's finally worth it," she said.

Currently, many buyers will have to give up because they are fed up with the shortage of homes. "The lack of inventory is hampering some sales," said Lawrence Yun, NAR Chief Economist.

Real estate agents said that some homeowners are reluctant to sell for fear of having difficulty finding new homes due to lack of supply. In addition, the group of middle-aged homeowners are also delaying retirement, so they do not want to change accommodation. And people who have bought homes with very low interest rates are also afraid to change houses when interest rates are rising.

"It doesn't make sense for people to sell now, even when home prices are at such a high level," said Daryl Fairweather, chief economist at Redfin Corp.

As the supply of homes fell to a record low, existing home sales fell 4.6% in December, according to NAR. Real estate agents say those who didn't buy a home last year will continue to work. hot market this year.

"There's been a lot of people who've renewed their leases this past summer because they can't find a home to buy and are really frustrated," said Gene Montemore, real estate agent at Launch Real Estate in Scottsdale, Arizona.

But rising interest rates may deter some buyers, especially when home prices are near their peak. The median existing home price in 2021 rose to a record $346,900, up 16.9% from 2020, according to NAR.

Meanwhile, the average interest rate on 30-year mortgage loans was 3.56% on Thursday, the highest since March 2020, according to financial firm data. Freddie Mac himself.

Matt and Alison Mirandi experienced a super competitive market when they started hunting for homes in January 2021 in New Jersey. They used to have to queue for 200 people to see the house. "There is a scarcity of small homes for starters and it's only been a few years that they've skyrocketed in value," Mirandi said. They finally bought a four-bedroom house in Ramsey in December for $750,000, higher than expected.

There were 910,000 homes for sale in the U.S. at the end of December, a record low since NAR began tracking total inventories in 1999. At current sales rates, these homes are barely meeting the market. in 1.8 months, also a record low.

The number of homes under construction is also at a multi-year high. As more homes are completed this year, homeowners will be more willing to sell their old homes. However, builders are being delayed due to labor shortages and supply chain issues.