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The chief economist at the National Association of Realtors is predicting the number of existing homes sold in America 2020 will be higher than last year. But, he said, an even busier housing market is ahead for 2021.
Lawrence Yun said he expects sales of existing homes nation-wide to be up 3 percent year-over-year by the close of 2020. The favorable climate created by historically low mortgage interest rates set of record demand for homes across America, particularly in vacation areas and the suburbs of the country’s big cities.
“The consequent rise in home prices has boosted wealth accumulation for homeowners,” Yun said while speaking at NAR’s 2020 Realtors Expo Tuesday. “But the opposite side of this will mean the continued decline of housing affordability and will limit future homeownership opportunities for young adults if housing supply is not greatly increased.”
In total, the nation’s real estate markets now have less than four months’ supply of homes on the market, a down from the range of five to seven months it held since late 2013, Yun’s presentation noted. This shortage and the continuing strong interest will likely see the nation’s home prices rise by 6 percent by the end of 2020.
Massachusetts home sales totals may yet hit that mark, with year-to-date single-family sales down less than 1 percent compared to October 2019 according to The Warren Group, publisher of Banker & Tradesman, and evidence of strong demand continuing. Year-to-date condominium sales are just under 5 percent down compared to last year.
The state’s home prices will likely beat Yun’s predictions for the nation at large: The Warren Group reports the median year-to-date single-family sale price was $442,500 as of Oct. 31, a 10.6 percent jump over the same point last year. The year-to-date median condo sale price is up 9.2 percent over last October.
Headed into next year, Yun predicts the favorable climate for residential real estate will continue, with low interest rates continuing and sales of existing homes increasing 9 percent in 2021. Home price increases will moderate over 2020, he forecasted, with a sale-price run-up of only 3 percent.
If President-elect Joe Biden is able to get the $15,000 first-time homebuyer tax credit he proposed on the campaign trail through a likely divided Congress, it will add to demand.
“The Biden presidency could bring several impactful changes to the housing market,” Yun said. “The homebuyer tax credit he proposed as a candidate would help Americans cover their down payment costs and is likely firmer assurance of government guarantees to mortgages backed by Fannie Mae and Freddie Mac.
