The 2020 U.S housing market has featured home price trends that are nothing like we had ever seen before. With everything that has occurred this year, it was perfectly natural to predict that home prices would historically drop as a result of the pandemic. To the surprise of many, home prices have been trending upwards amid the pandemic. The housing market was a busy haven as other economic sectors were slowly dying.
The U.S housing market has had a median home price hit just above $320,625, which is the highest point ever. “The largest increase ever recorded in the Case-Shiller national home price index (which goes back through 1988) was 14.5% in September 2005,” says Redfin. “But in the week ending October 4, home prices were up 16% from the same week a year earlier.”
The rising home prices could get many scared and shy off from buying a home. Others may be asking if home buying is still affordable. Regardless of the high home prices, no one should be scared of the housing market. Here is the thing, home values have been rising this year, while on the other hand, mortgage rates have been falling. This counter-events results in home affordability becoming a lot better. This means that as home prices continued to trend upwards, low mortgage rates gave home buyers more buying power.
Moreover, the housing prices have been rising as the housing inventory remains historically low. According to the Redfin report that covered a period that ended on October 4, “active listings (during the period) fell 28% from 2019 to a new all-time low.”
“The rate of year-over-year supply declines has remained consistent at this level for the past few months,” the report stated. This indicates that there is a high demand for homes, where buyers quickly snap up homes as soon as they are marked for sale.
Why have home prices been spiking up in 2020?
Home values have been trending upwards amid the pandemic due to the increasingly high demand accompanied by low housing inventory. When most sectors of the economy were shut down and people forced to quarantine and remain at home, most of them begun to reconsider where they have been living. This saw many people move to the suburbs where there is more living space and less cost of living.
Elsewhere, those who had well-established households are also moving in search of more living space as their adult children resort back home. According to the Pew Research Center, 52% of young people (18-29 years) are now living with parent(s).
Are home values going to drop?
The housing inventory remains low, while the demand remains high; therefore, home prices are not likely to start falling this year.
Conclusively, buying a home amid the pandemic has been largely affordable, mostly due to the low mortgage rates. This means that you still have the buying power, despite the high home prices. This still remains one of the best times to buy a home. You ought to take advantage of this lifetime opportunity.
At The Power Is Now, we’re committed to keeping you up-to-date with what is happening around the real estate market across the nation. Stay updated with any developing real estate market news by regularly checking our blog page at https://www.thepowerisnow.com/blog/. We also continue to advocate for advocate homeownership, wealth building, and financial literacy for low to moderate-income and minority communities. In this regard, we have a team of professional realtors— VIP Agents stationed nationwide to help you with anything you need in attaining your homeownership dreams. You can get in touch with the VIP Agents at https://www.thepowerisnow.com/vipagentsservices/. If you can’t find an agent from your area, you can contact me directly for a referral. You can also set up an appointment to speak directly to me at https://calendly.com/thepowerisnow/ericfrazier.
Disclaimer: The views and opinions of Eric Lawrence Frazier are his own and do not necessarily represent First Bank or any organization affiliated with Eric Lawrence Frazier, or the Power Is Now Media Inc. First Bank is an Equal Credit Opportunity Lender. Eric Lawrence Frazier, MBA, is also a Vice President and Mortgage Advisor with First Bank. NMLS#461807 and a California Licensed Real Estate Broker DRE# 01143482. Email: Eric.frazier@fbol.com. Ph: 714- 475-8629.
Eric Lawrence Frazier MBA
President and CEO
The Power Is Now Media Inc.
Work cited.
