With a worldwide health crisis that drove a pause in the economy this year, the housing market was greatly impacted. Many have been eagerly awaiting some bright signs of a recovery. Based on the latest Existing Home Sales Report from the National Association of Realtors (NAR), June hit a much-anticipated record-setting rebound to ignite that spark.
According to NAR, home sales jumped 20.7% from May to a seasonally-adjusted annual rate of 4.72 million in June:
“Existing-home sales rebounded at a record pace in June, showing strong signs of a market turnaround after three straight months of sales declines caused by the ongoing pandemic…Each of the four major regions achieved month-over-month growth.”
This significant rebound is a major boost for the housing market and the U.S. economy. According to Lawrence Yun, Chief Economist for NAR, the momentum has the potential to continue on, too:
“The sales recovery is strong, as buyers were eager to purchase homes and properties that they had been eyeing during the shutdown…This revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue.”
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*APR 2.17%
30 Year Fixed Rate 2.50%
**APR 2.66%
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With mortgage rates hitting an all-time low, dropping below 3% for the first time last week, potential homebuyers are poised to continue taking advantage of this historic opportunity to buy. This fierce competition among buyers is contributing to home price increases as well, as more buyers are finding themselves in bidding wars in this environment. The report also notes:
“The median existing-home price for all housing types in June was $295,300, up 3.5% from June 2019 ($285,400), as prices rose in every region. June’s national price increase marks 100 straight months of year-over-year gains.”
The graph below shows home price increases by region, powered by low interest rates, pent-up demand, and a decline in inventory on the market:
Yun also indicates:
“Home prices rose during the lockdown and could rise even further due to heavy buyer competition and a significant shortage of supply.”
Bottom Line
Buyers returning to the market is a great sign for the economy, as housing is still leading the way toward a recovery. If you’re ready to buy a home this year, reach out to a local real estate profession.al to make sure you have the best possible guide with you each step of the way.
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*The Annual Percentage Rate is based on a a single family owner occupied purchase or rate & term home loan with a maximum loan amount of $510,399.00 a 1.875% interest rate, 1.25 point and a discount fee of $3838.42, a 15 day rate lock, Fixed Rate for 15 Years with a payment of $3248.17 a 80% Loan to Value, and a minimum credit score of 740.**The Annual Percentage Rate is based on a single family owner occupied purchase or rate & term refinance home loan with a maximum loan amount of $510,399.00 a 2.50% interest rate, 1.00 point and a discount fee of $3,067.50, a 15 day rate lock, Fixed Rate for 30 Years with a payment of $2.016.70 a 80% Loan to Value, and a minimum credit score of 740 . **** The rates and annual percentage rate (APR) will vary depending upon the actual down payment percentages, points and fees for your transaction. The rates quoted are for home purchase or Rate & Term Refinance loans. Refinance cash out loans may have a higher rate. The rates may change or not be available at commitment or closing or may be subject to product restrictions. Rates advertised are as of May 7, 2020. Rates are subject to change without notice. 178 Trinity Pass, Pound Ridge NY 10576. MORTGAGE BROKER ONLY, NOT A MORTGAGE LENDER OR MORTGAGE CORRESPONDENT LENDER NMLS #1375 & 42481.* Registered Mortgage Broker NYS Department of Finance, Loans arranged through third party providers.
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