Here are the updated housing market trends & predictions for 2020 & 2021. The housing market is not only doing well but it also remains highly supportive of the economic recovery of the country. It remains a hot seller's real estate market, with annual price growth reaching record highs and inventory continuing to fall. New home sales have risen strongly during the pandemic and existing home sales are at a 1-year high.
As prices keep climbing, it just shows the resilience of the US housing market in the face of an ongoing economic disaster. Record-low mortgage rates and shortage of inventory has kept the US housing market strong with respect to buyer demand. Strong housing demand pushed by the pandemic is driving prices insane.
As was expected, home buying and selling prospects drastically improved in September 2020 from pandemic lows. With unusually high buyer interest this late in the homebuying season, buyers are moving much faster than this time last year to beat out competition and lock in low mortgage rates.
Homes are being sold at an increasingly fast pace when compared to the previous year. Housing prices have surged to new records due to very strong demand but low mortgage rates are helping buyers offset this increased cost. Mortgage rates for housing are anticipated to stay at near 3% over the next 18 months which will make homes more affordable.
The housing sales and prices have stayed strong through the summer months amid increasingly short inventory and high demand. This strong buyer activity points to a fall housing market that is more active than normal, where buyers may face more competition and may have to act more quickly than usual to snag their dream home.
The national median asking price on Realtor.com in September 2020 was $350,000, up 11.1% compared to last year. Prices could rise even further due to heavy buyer competition and a significant shortage of supply. Housing inventory continues to be constrained by stronger than normal buyer demand and little new inventory coming on to the market.
These new properties are quickly taken out of the market from heavy buyer competition. The national bousing market inventory has declined by 39.0% year-over-year, and the count of newly listed properties for sale in September also decreased by 13.8% since last year. Therefore, housing units are still in short supply with unsold inventory sitting at a 3.0-month supply at the current sales pace.
It is down from 3.1 months in July and down from the 4.0-month figure recorded in August 2019. This figure is a sign of a strong seller's real estate market. The improved selling prospects are a good sign and will need to remain on that path to bring more homes into the market.