Home sales were strong throughout 2020, with purchase applications up 42% in December 2020 compared to same period in 2019. These results are much better than many projected in early 2020, when the Covid Pandemic brought our nation to a standstill for months. The historically low mortgage interest rates in 2020 is the clear reason for the stellar home sales market performance.
The National Association of Home Builders (NAHB) coupled with Wells Fargo 35 years ago to create the Housing Market Index (HMI). NAHB.org defines the NAHB/Wells Fargo Housing Market Index (HMI) as based on a monthly survey of NAHB members designed to take the pulse of the single-family housing market. The survey asks respondents to rate market conditions for the sale of new homes at the present time and in the next six months as well as the traffic of prospective buyers of new homes.
With many changes happening throughout 2020, one thing has remained consistent; the growth of home purchase demand. The combination of historic low mortgage interest rates and lowering available homes for sale, the pressure has created home purchase demand.
A recent article by CNBC.com provides an excellent overview of the details that report a historic increase in existing home sales in June over May. The key points they present include respected sources like the National Association of Realtors:
There is a multitude of information on every media outlet about the coronavirus impact on our lives and businesses. And there is a lot of misinformation included in some of what we are reading and hearing.
Fannie Mae’s Home Purchase Sentiment Index (HPSI) hit a record high in July 2019, according to an article on FannieMae.com. They state that the increase results from “Confidence About Not Losing Job” as well as other factors.
For those who have considered buying a home, but have not yet pulled the trigger, this may be the year to make that move. After multiple years of a seller’s market, many sources reflect a shift to a buyer’s market.
There is overwhelming statistics proving that our nation is facing a housing shortage crisis. The shortage has caused substantial sales price increases, preventing many potential buyers from affording home ownership.