COVID continues to change the landscape in terms of the way that people now view homes. According to the National Association of Home Builders (NAHB) Chairman Chuck Fowke, “The concept of ‘home’ has taken on renewed importance for work, study and other purposes in the COVID era.”
The housing market continues to be an economic bright spot thanks to increased buyer interest in the suburbs and small towns. The Mortgage Bankers Association (MBA) estimates that September new home sales slowed slightly from August but remained well ahead of 2019’s pace.
It’s a small silver lining in contrast to all else that we face today. True to its more standard path of destruction, COVID has certainly hurt construction. Fowke further notes that “it is becoming increasingly challenging to build affordable homes as shortages of lots, labor, lumber and other key building materials are lengthening construction times.”
Nonetheless, continuing to pick up steam are second homes. According to Mortgage News Daily (MND), there were approximately 7.5 million second homes in the U.S. in 2018, the most recent year for which data is available. This is 5.5 percent of the nation’s total housing stock.
It’s no surprise that the largest share of these homes is in Florida with a total of 1.1 million homes, or 14.5 percent of the country’s total. Massachusetts makes the list as having one of the ten counties with the largest absolute number of second homes. Surely, anyone with a Massachusetts license plate can guess which one. It’s of course Barnstable County, otherwise known as Cape Cod and the Islands.
Also on the rise – existing home sales, which measures closings on existing homes. Existing home sales were up 9.5% in September and up 21%, year over year, which is the highest pace since 2006, according to MBS Highway. This underscores the strength of the current housing market.
Continuing to help fuel the industry are low mortgage rates. Mortgage rates remain quite low, although not at all all-time low. According to Mortgage News Daily, the all-time low occurred in early August. However, when considering best-case-scenario rates, purchase rates are still relatively close to all-time lows.