The number of homes for sale was already low at the beginning of 2020. It only got worse from there. The pandemic, along with surging buyer demand, led to fewer choices and higher prices for hopeful home buyers. Homes sold quickly as competition spiked. But where was for-sale inventory at the end of the year? Well, according to a new report from the National Association of Realtors’ consumer website, the number of homes for sale was down 39.6 percent year-over-year in December, hitting an all-time low. But there may be relief on the way. The number of new listings improved during the month and was just 0.8 percent lower than the year before. This hints at a possible improvement in the coming months. Danielle Hale, the website’s chief economist, says any gains will likely take until the second half of 2021. “While December’s data points to possible relief on the horizon, this figure has been impacted the most in areas with large COVID surges, and consistent improvement will be key in order to get out of this extreme shortage,” Hale said. “We eventually expect to see improvements in the supply of homes for sale, especially in the second half of the year.” (source)

Fannie Mae’s Home Purchase Sentiment Index measures Americans’ perception of the current housing market and their personal financial situation. The index serves as a gauge of how optimistic consumers are about buying or selling a home. In December, sentiment declined from the month before, with fewer Americans saying it’s a good time to enter the market. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says the pandemic may be behind the decline. “The HPSI declined for the second consecutive month and fell to its lowest level since May 2020, as consumers adjusted to the worsening COVID-19 conditions of the first few weeks of December – the survey collection period,” Duncan said. But though the index fell from the previous month, 52 percent of respondents still feel it’s a good time to buy. Similarly, about half of respondents said it was a good time to sell a house. The results reflect the cautious optimism potential home buyers and sellers are feeling right now. On the one hand, favorable mortgage rates and pent-up demand are fueling interest; on the other, higher home prices, the pandemic, and low inventory are causing hesitation. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates declined during the last two weeks of 2020. In fact, rates were down across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. The drop means mortgage rates remain at all-time survey lows. Joel Kan, MBA’s associate vice president of economic and industry forecasting, said record-low rates are good for fixed-rate borrowers. “The record-low rates for fixed-rate mortgages is good news for borrowers looking to refinance or buy a home, as around 98 percent of all applications are for fixed-rate loans,” Kan said. But while rates remains favorable, requests for mortgage applications fell 4.2 percent during the holiday season, mostly due to a 6 percent drop in refinance demand. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Home design trends, by their nature, come and go. There’s always a hot new color or a must-have fashion. And just as quickly as they appear, they’re erased and replaced with the next hot new thing. But when you ask home buyers and homeowners what they want from their homes – beyond the aesthetics – their answers are remarkably consistent. In short, everyone wants their home to be comfortable, efficient, clean, and healthy. That doesn’t change. Home buyers and owners want things like smart thermostats, energy-star appliances, balanced ventilation, leak-detection systems, and other high-performance features that can help lower bills and improve the indoor environment. These have been popular features for years now and have only grown more popular since the onset of the coronavirus. This is no surprise. More time in the house has helped us focus on bettering our homes. And, more than likely, our desire for comfort and wellness at home will continue to live on well after the pandemic has subsided. (source)

Affordability conditions worsened during the final quarter of 2020, according to new numbers from ATTOM Data Solutions. Their fourth-quarter U.S. Home Affordability Report found that homes and condos were less affordable than their historical average in 55 percent of the 499 included counties. That’s up from 43 percent one year ago. Todd Teta, ATTOM’s chief product officer, says affordability has been slipping, but that can change. “Home prices have continued rising throughout 2020 and the housing market has remained remarkably resilient in the face of the brutal economic fallout from the coronavirus pandemic,” Teta said. “The future remains wholly uncertain and affordability could swing back into positive territory. But for now, things are going in the wrong direction for buyers.” The report compared average wage data with median home prices in order to determine whether or not a home buyer’s monthly expenses – including mortgage payment, property tax, and insurance – would require more than 28 percent of their monthly income. (source)

Luxury isn’t easy to define. The dictionary says it’s “the state of great comfort and extravagant living.” But since that leaves a lot to interpretation, we all have different ideas about what luxury really means. This is easy to see when thinking about the housing market. After all, a luxury home in one market can be vastly different than a luxury home in another. So, in order to get a better view of recent home sales, one new report broke them down into five price tiers. The results show that homes in the top – or luxury – tier are selling at a much faster pace than those in the middle and lower tiers. In fact, sales of luxury homes were up 60.7 percent from the year before, while mid-tier priced homes rose 14.8 percent and affordable homes were up 6.8 percent. In short, the luxury home market is far outpacing the rest of the housing market, and it’s not even close. Similarly, vacation- and second-home sales are also seeing a year-over-year bump, with demand for second homes up 100 percent in October. (source)