2021 started with a small surge in existing home sales compared to December 2020 levels, marking the second consecutive monthly gain. According to NAR, transactions on single-family homes, townhomes, condominiums, and co-ops surged 0.6% in January 2021 to a seasonally adjusted annual rate of 6.69 million units up from 6.76 million units in December 2020. January’s results were up 23.7% compared to the annual rate of 5.41 million sales in the same time last year.
Following January existing home report, home sales had surged in seven of the previous 8 months, while pending sales, which are considered a leading indicator for the next one or two existing home sales reports, posted losses in four straight months.
Single-family home sales were at a seasonally adjusted rate of 5.93 million, up 0.2% from 5.92 million in December, and a 23% year-over-year gain. On the other hand, condominium and co-op sales surged 4.1% from the previous month to a rate of 760,000 units, representing 28.8% annual growth.
“Home sales continue to ascend in the first month of the year, as buyers quickly snatched up virtually every new listing coming on the market,” said Lawrence Yun, NAR’s chief economist. “Sales easily could have been even 20 percent higher if there had been more inventory and more choices.”
While much of the economy has suffered due to COVID-19, the housing sector has been one of the few bright spots, according to Yun. “Home sales are continuing to play a part in propping up the economy,” he said. “With additional stimulus likely to pass and several vaccines now available, the housing outlook looks solid for this year.”
Yun says he expects more jobs to return, which will spur homebuying in the coming months and predicts existing-home sales will reach at least 6.5 million in 2021. This will be despite an increase in mortgage interest rates due to the rising budget deficit and higher inflation.
Existing home sales in February 2021.
According to a March NAR report, existing home sales declined in February, after recording gains in the previous two months. According to the report, total existing-home sales completed transactions that include single-family homes, townhomes, condominiums and co-ops, dropped 6.6% from January to a seasonally-adjusted annual rate of 6.22 million in February. Sales in total climbed year-over-year, up 9.1% from 5.70 million in February 2020.
“Despite the drop in home sales for February – which I would attribute to historically-low inventory – the market is still outperforming pre-pandemic levels,” said Lawrence Yun, NAR’s chief economist.
Yun further warned of a possible slowdown in growth in the coming months as higher prices and rising mortgage rates will cut into home affordability.
“I still expect this year’s sales to be ahead of last year’s, and with more COVID-19 vaccinations being distributed and available to larger shares of the population, the nation is on the cusp of returning to a sense of normalcy,” Yun said. “Many Americans have been saving money and there’s a strong possibility that once the country fully reopens, those reserves will be unleashed on the economy.”
Existing home sales in March 2021.
Work cited.
http://www.mortgagenewsdaily.com/02192021_existing_home_sales.asp.
https://www.nar.realtor/newsroom/existing-home-sales-descend-6-6-in-february.
