So far 2020 has not impacted the current home buying boom and it does not appear to be slowing down. The National Association of Realtors reported that existing-home sales grew nearly 21% from one year ago and homes sold faster in September than what we normally see during this season as low-interest rates drove pent-up buyer demand.(1)
Forbes magazine reports housing is in a “full-fledged boom”. Last quarter saw $1.1 trillion in mortgages issued, the most in 14 years, while in September, the number of people buying new homes hit a 14-year high!(2)
In addition, residential construction spending went up 2.8% in September, to a level 10.1% higher than a year ago. These new homes should soon begin to relieve the inventory shortage many markets are experiencing.(3) Part of what is driving this trend is the number of young buyers (under age 35) entering the market. Looking at the chart below we can see they left the market after the 2008 crisis but since 2018 that trend has begun to reverse. Given record low inventory and increasing demand the housing market is currently looking very strong.
- Source: National Association of Realtors (https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales).
- Source: Forbes (https://www.forbes.com/sites/stephenmcbride1/2020/10/29/american-housing-is-in-a-full-fledged-boom/?sh=7ae6e09d3df9).
- Source: U.S. Census Bureau (https://www.census.gov/construction/c30/pdf/release.pdf).
