October 2020 has been an interesting month for the housing market, but the takeaway is that the housing market is still thriving. Mortgage rates are at record lows, demand remains strong for new and existing homes, and the housing market is the strongest its been in at least 5 years. With everything going on, it’s only natural to worry about the future, but the housing market should not cause you concern.
Throughout the year, the Federal Reserve (“the Fed”) has repeatedly lowered mortgage rates to new record lows. Initially, this made homes affordable to a larger number of people. Given the low inventory of homes, and the large number of people able to afford these homes, sales surpassed expectations.
In September 2020, new single-family homes sold at a seasonally adjusted annual rate of 959,000. Moreover, September 2020 was the fourth consecutive month that existing homes sold at a seasonally adjusted rate of 6.54 million (which is an increase of 9.4% from August 2020, and an increase of 21% from September 2019).
The market adapted to the high demand, and low supply, by increasing the average price of homes incrementally until purchasing hit a plateau; this is not cause for alarm, that just means housing prices are at the right place. Another impact of the high demand and low supply is that builders became bullish. As we noted previously, builder confidence hit an all time high of 83 in September 2020 (the previous record was 78). As such, we can expect the housing market to continue thriving.
The world is hectic, but the housing market is not. At the Chernov Team we understand that knowledge is power, and knowledge of the market is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.
The World is Hectic but the Housing Market is Not
