Report: Existing home sales hit 14-year high in 2020

Jan. 22 (UPI) -- Existing home sales in 2020 increased 5.6% from 2019, the largest increase since the Great Recession, and the median home sales price went up nearly 13%, the National Association of Realtors reported Friday.

Helped by record-low interest rates, home sales rose in December and for 2020 as a whole. Volume of existing home sales reached 5.64 million in 2020 while the median price of $309,800 was 12.9% above 2019.

Inventory fell to a record low, with a 1.9-month supply, down from 2.3 months in November. Homebuilders are working to meet the demand, pushing housing starts to an annual rate of 1.7 million in December.

"Home sales rose in December, and for 2020 as a whole, we saw sales perform at their highest levels since 2006, despite the pandemic," said Lawrence Yun, the chief economist for the National Association of Realtors. "What's even better is that this momentum is likely to carry into the new year, with more buyers expected to enter the market."

Yun said not even an expected upswing in the interest rate in 2021 should halt the housing market overall.

"Although mortgage rates are projected to increase, they will continue to hover near record lows at around 3%," Yun said. "Moreover, expect economic conditions to improve with additional stimulus forthcoming and vaccine distribution already underway."

The report said new homebuyers made up 31% of sales in December, the same as in 2019 but a fall from 32% in November 2020.

The median existing home prices increased in all regions, with December's national price increase marking 106 straight months of year-over-year increases. In December, it took 21 days to sell a house on average, a departure from the recent past.

"It is unusual because every year during the holiday season we would see days on market increase, but not this year," Yun said.