Within the month of October, sales of existing homes soared well past expectations. In fact, sales rose 4.3% from the month of September and 26.6% annually. Also, in an interesting note, the median price for homes sold in October was $313,000 which is up 15.5% annually. This is actually the highest median price on record and reflects "the far stronger sales on the higher end of the market".
I believe that this can be accredited to the extremely low interest rates that this country is seeing. More people are taking out loans and buying houses. The housing market is seeing a low supply and very high demand. From this, it is expected that prices increase as there is a shortage of the product.
My question for this would be, the housing market continues to increase when it is expected to "correct" and go into a decline, do you see this slowing down anytime soon? If you think it will, what are the indicators for your claim?
https://www.cnbc.com/2020/11/19/october-existing-home-sales-see-spectacular-26point6percent-annual-increase.html
5 comments:
I think that the booms in sales in the housing market are in fact due to the pandemic which has considerably led to lower interest rates. My claim would be that as things go back to "normal," sales will decrease because interest rates will go back to their regular levels which most Americans cannot easily afford. This might, in turn, provoke a rise in housing supply and increasing prices in the long run. It must be noted, however, that the housing market may continue to strive for a while.
I agree with Marya, and I would add another reason to why housing sales are booming. It is because people are now moving to remote work and learning and want a bigger or better living condition as compared to what they wanted pre-pandemic.
In addition to what has already been said, I would say that the houses that have been sold during this time are probably to more wealthy individuals that can afford to move during this time. I think this is why the median price is so high. There are wealthy people that are trying to take advantage of the low interest rates as you suggested. I do think that at some point this will result in a correction in the market. I think that we could see a slowing of sales once the interest rates rise up again.
I agree with Chase. A lot of the houses being bought up seem to be bought by the more affluent. Regular people are having to deal with job losses, reduced income due to less working hours, and depend on stimulus checks from the government.
i agree with you marya I definitely think that people that formally only saw a home as a place to sleep after work are now needing to fill the need of more space because their home is now their work space
Post a Comment