We’ve been hearing from many of our realtor friends that business has been good. It’s been busy for the mortgage industry as well. Refinancing has been especially popular with the rush to take advantage of historically low rates. But what’s interesting to see on both sides is the shifting profile of home buyers and sellers that have occurred over the last 6-8 months, supporting that momentum.
The National Association of Realtors’® (NAR’s) 2020 Profile of Home Buyers and Sellers, supports our anecdotal evidence with some facts. In their report based on a survey of recent home buyers and sellers, they noted that the changes in the behaviors were seen across the following trends:
- Buyers purchasing after March were more likely to purchase a multi-generational home– 15 percent versus 11 percent who purchased before April.
- 14 percent of buyers who purchased in April or later said their transaction was delayed due to COVID-19
- Sellers who closed in April or later were more likely to sell because their home was too small – 18 percent compared to 13 percent of those before April
In an earlier post, we also covered a sudden shift in subsets of the population opting to leave the city for the suburbs, with a softening condo market and increase in rental vacancies.
Again, NARS found that buyers who purchased after March were more likely to relocate to the suburbs and were more likely to pay more for that home, no matter its location. They reported buyers paying an average of $339,400 compared to $270,000 for those who purchased before April.
They also share good news for realtors. The percentage of sellers using an agent for their transaction was at a near historic high of 88%. Conversely, for-sale-by-owner transactions were at near historic lows of just 8%.
As the profile of buyers and sellers ebbs and flows across different attitudes, behaviors and participation in the housing market as this pandemic progresses, the overall direction of the market has remained the same – and that is UP.
According to MBS Highway, existing home sales were up 4.3% in October, which is above expectations of a 1.2% decline. Additionally, sales are up 27% year -over-year with the median home prices reported at $313,000. This is yet another record and up 15.5% year-over-year.
A tip for realtors, first time home buyers moved up from 31% to 32%, despite the competition for lower priced housing. Be sure to market to them and make sure they are aware that they don’t need 20% for a down payment. In fact, BOE Mortgage can help identify the right first time homebuyer program for them with many low down payment options.