The demand for housing in the U.S. has reached a new all-time high since 2017, a rare occurrence for this time of year when the market typically slows.
According to a Redfin report, a recovering economy and all-time low mortgage rates are critical factors in the current market.
Redfin’s Homebuyer Demand Index reported that in addition to accelerated demand, the number of homes listed for sale is decreasing at a slightly slower rate than in 2019 and 2020.
The report analyzed data from over 400 U.S. metro areas during the four-week period ended Nov. 14.
New listings were down 12% since six weeks earlier. Still, this is lower than the 18% decrease over the same period in 2019.
The median sale price of homes increased 13% year-over-year to $357,881. Asking prices of newly listed homes were also up 13% from the same time a year ago.
Active listings fell 22% from 2020 and 41% from 2019.
“People who tried to buy a home in the spring are coming back for round two, only to find the market is still quite difficult because of a lack of homes for sale,” said Daryl Fairweather, Redfin’s chief economist. “A lot of home buyers wish they had bought last year, now that it’s not just homes that are more expensive, but also gas, groceries and dining out. Many buyers today are limited to move-in-ready homes because it is so difficult and expensive to purchase new appliances or find contractors to make improvements.
Why aren’t you buying a home, now?
If you’ve been in your home for longer than five years, you’re not alone. According to recent data from First American, homeowners are staying put much longer than historical averages (see graph below):As the graph shows, before 2008, homeowners sold their houses after an average of just five years. Today, that number has more than doubled to over 10 years. The housing industry refers to this as your tenure.
To really explore tenure, it’s important to understand what drives people to make a move. An article from The Balance explores some of the primary reasons individuals choose to sell their houses. It says:
“People who move for home-related reasons might need a larger home or a house that better fits their needs, . . . Financial reasons for moving include wanting a nicer home, moving to a newer home to avoid making repairs on the old one, or cashing in on existing equity.”
If you’ve been in your home for longer than the norm, chances are you’re putting off addressing one, if not several, of the reasons other individuals choose to move. If this sounds like you, here are a few things to consider:
As the past year has shown, our needs can change rapidly. That means the longer you’ve been in your home, the more likely it is your needs have evolved. The Balance notes several personal factors that could lead to your home no longer meeting your needs, including relationship and job changes.
For example, many workers recently found out they’ll be working remotely indefinitely. If that’s the case for you, you may need more space for a dedicated home office. Other homeowners choose to sell because the number of people living under their roof changes. Now more than ever, we’re spending more and more time at home. As you do, consider if your home really delivers on what you need moving forward.
One of the biggest benefits of homeownership is the equity your home builds over time. If you’ve been in your house for several years, you may not realize how much equity you have. According to the latest Homeowner Equity Report from CoreLogic, homeowners gained an average of $33,400 in equity over the past year.
That equity, plus today’s low mortgage rates, can fuel a major upgrade when you sell your home and purchase a new one. Or, if you’re looking to downsize, your equity can help provide a larger down payment and lower your monthly payments over the life of your next loan. No matter what, there are significant financial benefits to selling in today’s market.
If you’ve been in your home for 5-10 years or more, now might be the time to explore your options. Today’s low rates and your built-up equity could provide you with the opportunity to address your evolving needs. If you feel it’s time to sell, let’s connect.
Okay, condo buyers only.
This blog is read by hundreds of readers every day. Most aren’t my clients.
Why are the rest of you thinking of buying, these days?
Aren’t you concerned about your purchase losing value over the coming months? Aren’t you concerned about being able to qualify for a loan?
On the Boston.com real estate blog, there are a couple of commenters who seem to think that anyone who buys a home in this market is absolutely insane. They also think that anyone who suggests that the real estate market in Eastern Massachusetts is slow but steady (meaning, to me, “healthy”) is full of baloney.
I have my own opinions, based on what I see and hear. Of course, my point of view is considered biased.
So, I’ll leave it to you to tell it like it is.
If you are looking to buy sometime over the coming months, why?