After ticking up 0.7% in December, US existing home sales in 2020 clocked in at their highest level in 14 years. What juiced the housing market last year?
- Historically low borrowing costs: The 30-year fixed-rate home loan fell to 2.77% this week. It stood at 3.60% a year ago.
- Coronavirus lockdowns: After months of being cooped up in an apartment with young kids, you weren’t the only one thinking, “I gotta get a bigger place.”
Here’s the crazy part: Home sales could have been much higher—if only there were more homes to sell. 1.07 million homes were on the market at the end of December, 23% fewer than December 2019.
That’s pushing up prices
The median price on an existing home was $309,800 in December, 13% higher than a year earlier. When you look closely, you’ll see that the higherend of the market is doing most of the heavy lifting.
- Sales of homes <$100,000: down 15% annually
- $500,000–$750,000: up 65%
- $1,000,000+: up 94%
What these numbers show: If you made it through the pandemic unscathed, like many in the higher-income brackets did, you tried to level up your crib.
Source: Neal Freyman for Morning Brew