HOUSTON – (Realty News Report) – Low mortgage rates are powering Houston home sales to record highs and when the final annual tally is reported soon, 2020 will go down as the best year ever for Houston home sales.
In its weekly update released Wednesday, the Houston Association of Realtors reported home sales were up 8.7 percent in the week ending Dec. 28 (week 52 of 2020).
At the end of November, home sales were outpacing last year’s record volume by 9 percent, on a year-to-date basis, HAR said.
Sales have not tapered off in December, meaning 2020 will be a record-setter year, despite the coronavirus pandemic that froze the market temporarily when Covid emerged in the spring.
But with 30-year mortgage rates below 3 percent, buyers shopped – and bought homes – in droves.
Single-family home sales soared 25.6 percent in November with 7,990 units sold throughout the greater Houston area compared to 6,359 a year earlier.
The inventory of homes for sale hit record lows because the buying was so brisk. Throughout the summer and into the fall, the Realtors association continued voice fears that the tight inventory would cause the pace of sales to diminish.
However, projections from Realty News Report showed that the tight inventory would not cause sales to decline. On September 10, Realty News Report reported: “Concerns about the tight inventory may be overstated, according to Realty News Report analysis. Homebuilding is strong and housing starts will approach an all-time high in 2020. In early September, the Houston area had more than 34,000 properties for sale. Inventory should be sufficient in most sectors and Houston appears to be heading toward an all-time record year.”
With fewer new listings entering the market, inventory registered a 2.2-months supply compared to 3.6 months a year earlier and is at historically low levels, HAR recently reported.
Home prices have increased sharply in 2020.
In November, the single-family home average price climbed 15.0 percent to an historic high of $341,765 while the median price increased 12.0 percent to $270,000 – the second highest level of all time.
A national report from Redfin showed home prices rose sharply at year-end. The median home sale price increased 14% year over year to $320,714 during the 4-week period ending December 20, according to a new report from Redfin.
Frank Nothaft, chief economist at CoreLogic, recently offered some market projections at the National Association of Real Estate Editors (NAREE) conference:
- Mortgage rates remain low, supporting refi and home purchases. “Low mortgage rates [are] projected to continue in 2021 and 2022.”
- 2021 refinance [will be] less than in 2020, more than in 2019.
- The U.S. Home Price Index is forecast to rise, albeit slower than in 2020.
- Affordable shelter remains a challenge for many families.
- Distressed sales will rise but remain small compared to the Great Recession.
Dec. 30, 2020 Realty News Report Copyright 2020
File: Record Houston Home Sales in 2020