HOUSTON – (Realty News Report) – Low mortgage rates drove Houston home sales to record levels in 2020, and when the final annual totals are published, this year will be remembered as the strongest on record for Houston real estate.
In its weekly update released Wednesday, the Houston Association of Realtors (HAR) reported an 8.7 percent increase in home sales for the week ending Dec. 28 (week 52 of 2020).
Through the end of November, year-to-date sales were running about 9 percent ahead of the previous year’s record volume, HAR noted.
Sales momentum continued through December, helping to secure 2020 as a year of new sales records despite the spring market disruption caused by the coronavirus pandemic.
Mortgage rates near or below 3 percent for a 30-year fixed loan encouraged many buyers to actively search for and purchase homes.
In November, single-family home sales surged 25.6 percent, with 7,990 units sold across the greater Houston area compared to 6,359 in November 2019.
Strong buyer demand pushed available inventory to historic lows. During the summer and fall, HAR frequently warned that limited supply might slow the pace of sales.
However, analysis by Realty News Report indicated that tight inventory would not necessarily curb sales. In a September 10 update, Realty News Report explained that robust homebuilding and rising housing starts—expected to approach record levels in 2020—would help supply remain adequate in many market segments. At that time, the Houston area had more than 34,000 properties listed for sale, supporting a projection that Houston was on track for a record-setting year.
With fewer new listings coming onto the market, available supply fell to roughly a 2.2-months level compared with 3.6 months a year earlier, marking historically low inventory levels, HAR reported.
Home prices climbed substantially throughout 2020.
In November, the average price for a single-family home rose 15.0 percent to a record $341,765, while the median price increased 12.0 percent to $270,000—the second-highest median on record.
Nationally, an industry analysis showed year-end price gains as well. During the four-week period ending Dec. 20, the national median home sale price rose 14 percent year over year to $320,714, according to a December market update from Redfin.
Frank Nothaft, chief economist at CoreLogic, shared several market projections at the National Association of Real Estate Editors (NAREE) conference:
- Mortgage rates are expected to remain low, supporting both refinance activity and home purchases through 2021 and into 2022.
- Refinance volumes in 2021 are projected to be lower than in 2020 but higher than 2019.
- The U.S. Home Price Index is forecast to continue rising, though at a slower pace than in 2020.
- Housing affordability will remain a challenge for many households.
- Distressed sales are likely to increase but should remain small relative to levels seen during the Great Recession.
Dec. 30, 2020 Realty News Report Copyright 2020
File: Record Houston Home Sales in 2020