Home sales are typically slower in the winter months, especially if you live in a colder climate. It can be a time for realtors to prepare for the peak season, or perhaps even take a much-needed vacation.
According to the National Association of Realtors (NARS), the slowest months of selling activity are November, December, January and February. When they compared the sales in the peak season with the activity in the slow season, they saw that the total number of sales in the slow season accounts for 68 percent on average of the total activity in the peak season. Among these four months, January is typically the slowest time for home sales activity.
Fast forward to 2021. Has anyone had a moment to breathe yet?
So far, we see predictions that the interest rates will stay low. With low rates comes more buying power. There is also anticipation of more homes being available on the market. As shown in the chart below, single family starts are on the rise, from permits to completions.
In terms of who is shopping, according to Realtor Magazine, more young Americans under the age of 35 are rushing to become homeowners during the pandemic. This age group had a home ownership rate of 40.2% last quarter. First time homebuyers stayed relatively steady at 31% of the market. It’s a good idea to continue to market to them and educate them that they may not need a full 20% down on a home.
When it comes to mortgages, MBS Highway reported that overall application volume decreased 4%. Purchases also dropped by 4%, however, they are still up 16% from this time last year. In the meantime, the average loan amount for homebuyers hit a record high at $395,200.
Overall, it seems like the perfect storm, and we’re not talking about a Nor’easter. Consistently low interest rates and the pandemic has changed everything about the way homebuyers shop. How busy will we remain in 2021? Zillow has forecasted that home sales will rise by 21%! They are additionally predicting that home prices will rise by 10.5% in 2021 overall with a peak of 13.5% in June.
As Chief Economist, Lawrence Yun, of NAR predicted – it will be one of the best winter sales years ever. What has been your personal experience? Are you finding you haven’t been able to take a break, or are you reading this message with your toes in the sand at the beach?