For weeks, it’s been assumed that the autumn season (and rising COVID-19 cases) might bring a slowdown to the housing market… and potentially, a reduction in prices. Aspiring homebuyers who were awaiting this slowdown now find themselves out of luck: There has actually been a frenzy of home buying activity in recent weeks, with little sign of it letting up. There are a number of contributing factors here, but historically low mortgage rates surely top the list.
Amazing Home Sales Numbers in September
Throughout the month of September, homebuying rates hit a rapid pace. In fact, early numbers suggest homes sold an average of 12 days faster than they did last September.
September is usually a pretty good month for home sales, with properties selling 25 percent faster than they do in January. Even by this historic standard, though, this September’s real estate activity has been vigorous, with homes selling 39 percent faster than they did at the start of 2020.
In fact, data from realtor.com shows that homes took an average of 54 days to sell last month; this is the shortest timeframe realtor.com has recorded since they started tracking this metric four years ago.
While home sales rates have been booming throughout the country, there are some regional distinctions: The Northwest has logged the most significant changes over last year, followed by the South and then the Midwest. Places like California have seen more modest increases in home sales turnaround but are still showing considerably better numbers over this time last year. And in the nation’s 50 largest metropolitan areas, homes are sold in just 44 days on average, compared with 54 days last September.
Overall, these trends have been extremely favorable toward sellers, who are seeing more and more competition for their listings; additionally, buyers are paying an average of $20,000 more per home than they did at the beginning of the year. The median sales price for a home has increased by more than 11 percent since this time last year.
Why the Flurry of Homebuying Activity?
As for why homes are selling so rapidly these days, experts posit a number of contributing factors:
- As more families are homebound, working from home offices and learning remotely, they’re feeling cramped and eager to spread out into more space.
- This high buyer interest has combined with historically low mortgage rates as well as low home inventory, creating a “perfect storm” for home buying. (Note that the housing supply is down by a staggering 39 percent annually; new listings have decreased by 14 percent from an already-low rate in August.)
- Finally, with COVID throwing school, work, and holiday schedules into disarray, the typical real estate calendar no longer seems to apply; where homebuyers historically avoid house hunting at the outset of the school year, that doesn’t seem to be a concern in 2020.
The bottom line: Real estate markets are thriving, and it’s largely to the benefit of sellers. If you’re looking to list, now’s an ideal time; and if you’re looking to buy, there are certainly opportunities to do so. Learn more by reaching out to LoanFleet, or by using our mortgage calculator to estimate what you might pay for a new home loan.