December 30, 2020
Real estate pros are quickly submitting offers for clients as the buyer frenzy, unusual for the winter season, continues.
Sales have slowed slightly from the high levels recorded this fall. Pending home sales slid in November by 2.6% compared to those in October, according to the National Association of REALTORS®’ Pending Home Sales Index, released on Wednesday. November’s decline marked the third consecutive month for monthly decreases in pending home sales.
“The latest monthly decline is largely due to the shortage of inventory and fast-rising home prices,” says Lawrence Yun, NAR’s chief economist. “It is important to keep in mind that the current sales and prices are far stronger than a year ago.”
Pending home sales are still up 16.4% compared to a year ago. All major regions are posting double-digit year-over-year increases.
“The market is incredibly swift this winter with listed homes going under contract on average at less than a month due to a backlog of buyers wanting to take advantage of record-low mortgage rates,” Yun says.
NAR’s Pending Home Sales Index reached a reading of 125.7 in November—an all-time high. An index reading of 100 is equal to the level of contract activity in 2001.
Yun predicts home sales to continue to perform strongly in 2021. He expects existing-home sales to increase about 10% and new home sales to surge by 20% in the new year.
“Economic growth is guaranteed from the stimulus package and from vaccine distribution, but high government borrowing will put modest upward pressure on interest rates,” Yun says.