Contract signings climbed 7.5% in October, and home sales for 2021 are on pace to hit a 15-year high, the National Association of REALTORS® reported Monday. Pending home sales rebounded after a decline in September.
Despite rising mortgage rates, home buyers appear undeterred by higher financing costs and home prices. Contract activity increased month over month in all four major regions of the U.S. NAR’s Pending Home Sales Index is a forward-looking indicator of home sales based on contract signings.
“Motivated by fast-rising rents and the anticipated increase in mortgage rates, consumers that are on strong financial footing are signing contracts to purchase a home sooner rather than later,” says Lawrence Yun, NAR’s chief economist. “This solid buying is a testament to demand still being relatively high, as it is occurring during a time when inventory is still markedly low.”
Yun notes that the gain in October assures that total existing-home sales in 2021 will exceed 6 million. That will mark the top performance in home sales in 15 years, Yun says.
He does forecast, however, home prices will increase at a “gentler pace” over the next several months and expects demand to be milder as mortgage rates increase. The 30-year fixed-rate mortgage averaged 3.10% last week, up from a 2.72% average a year ago, Freddie Mac reports.
Last month, contract signings increased at the strongest pace in the Midwest and South regions. The Northeast increased 6.9% in October, but contract signings are still down 10% from a year ago. The Midwest saw contract signings climb 11.8% in October; pending home sales are up 5.1% from a year ago.
Homes are selling faster than ever—in less than a week in the country’s most active housing markets.
Realtor.com® released a new report revealing housing’s top 10 ZIP codes for 2021. This year’s list showed some of the most significant drivers behind the hottest markets:
- Housing affordability with asking prices that offer bigger houses for the money
- A growing number of high-income millennials
- Close proximity to local amenities and outdoor activities
“The ZIPs that make our annual hottest report are very competitive, but this year, they are white hot,” says Danielle Hale, realtor.com®’s chief economist. “Homes in this year’s ZIPs are under contract in less than a week, which is three times faster than the contract times for last year’s hottest markets. While there’s no question that buyers have faced a challenging housing market during the pandemic, our hottest ZIPs list also highlights some of the silver linings. The rise in remote work has given some buyers more flexibility to live wherever they want, and many are finding larger homes at lower prices, as well as a higher quality of life, in the 2021 hottest ZIPs.”
Homes are selling in the top 10 markets an average of six days—31 days faster than the rest of the country. Home listing views on realtor.com® are up 156% compared to a year earlier.
The inventory shortage, which has been a nuisance for years now, is causing even greater disruption since the pandemic began. Fueling intense buyer competition and sky-high home prices, the historic supply crunch requires a “once in a generation” federal response to address decades of underinvestment and underbuilding, argues the National Association of REALTORS®.
There are areas of the country that exemplify the problem and support NAR’s urgent call. DeedClaim, an online deed preparation service, analyzed the 50 largest metros to identify the markets with the biggest housing deficits. The site crunched realtor.com® data to determine each metro area’s supply levels and analyzed population changes to find where the lowest amount of available housing is compared to demand.
Phoenix and Dallas topped the list with the biggest housing shortages. Cities in Southern states tended to have the largest housing shortages, according to the study.
Instead of trying to do it all — and doing nothing — pick a cleaning approach that is right for you now
The thought of spring cleaning can be as entrancing as a fairy tale — but getting through a giant list of tasks while having a busy life can be just as unrealistic as a cheerful Snow White twirling about in the forest, with birds tweeting and helping sweep with brooms in their little beaks. The key to successful spring cleaning, then, is to not try to do it all. Instead, pick from one of these six themes for your spring cleaning — and focus your energy where it will count. And if you decide to put on music, fling open the windows and twirl around with your mop, we won’t tell.
Whether it’s a new layout, improved seating or clever storage, there are lots of way to make your kitchen work better. But sometimes you have to tear something down to help your kitchen reach its full potential. Check out the before-and-after photos of these three kitchen remodels where walls came down — and let us know if you see a sledgehammer in your own kitchen’s future.
2021 National Housing Market Forecast and Predictions: Back to Normal
To say 2020 was a year of surprises is an extreme understatement. What started off as a bright year for the housing market and the economy was soon derailed by a global pandemic and severe economic recession. As detailed by my colleague, George Ratiu, the economic rebound has been sharp, but is by no means complete and created distinct winners and losers among sectors in the economy. Read more detailed thoughts on the overall economic context and outlook, here. One of the big winners has been the housing market, which saw home sales and prices hit decade-plus highs following decade lows in the span of just a few months. We expect housing’s winning streak to continue in 2021 as seasonal trends normalize and some of the frenzied momentum fades thanks to fresh affordability challenges. Below you’ll find our forecast and housing market predictions on key trends that will shape the year ahead.
Realtor.com 2021 Forecast for Key Housing Indicators
|Housing Indicator||Realtor.com 2021 Forecast|
|Mortgage Rates||Average 3.2% throughout the year, 3.4% by end of year|
|Existing Home Median Sales Price Appreciation||Up 5.7%|
|Existing Home Sales||Up 7.0%|
|Single-Family Home Housing Starts||Up 9%|