According to Freddie Mac This Week in Real Estate the average mortgage rate for a 30-year fixed loan fell to a record low for the 16th time this year and have been below 3% for 20 consecutive weeks. While both existing-home and new home sales dipped in November compared to October, consistent low rates have contributed to increases over prior year of 25.8% of existing-home sales and 20.8% of new home sales, respectively. Below are a few newsworthy events from the fourth week of December that influence our business:
Overall Home Sales Rise Nearly 26% From 2019. Existing-home sales in November climbed 25.8% compared to last year, the National Association of REALTORS reported Tuesday. Existing-home sales did dip down by 2.5% in November compared to October’s unseasonably high levels, however. The slight decrease last month ended a five-month streak of month-over-month gains. Still, all four major regions across the country posted significant year-over-year growth. “Home sales in November took a marginal step back, but sales for all of 2020 are already on pace to surpass last year’s levels,” says Lawrence Yun, NAR’s chief economist. “Given the COVID-19 pandemic, it’s amazing that the housing sector is outperforming expectations. Circumstances are far from being back to the pre-pandemic normal,” Yun says. “However, the latest stimulus package and with the vaccine distribution underway, and a very strong demand for homeownership still prevalent, robust growth is forthcoming for 2021.”
Mortgage Rates Reach Another Record Low, Merry Christmas! The average U.S. mortgage rate for a 30-year fixed loan fell one basis point this week to 2.66% – the lowest rate in the Freddie Mac’s Primary Mortgage Market Survey’s near 50-year history. This week’s mortgage rate broke the previous record set on Dec. 17. With this week’s record drop, there have now been 20 consecutive weeks when average mortgage rates have been below 3%, and the 16th time this year rates have broken their own record.
Affordability and Lack of Supply Put a Dent in New Home Sales. New home sales dipped in November, but remained at a solid level as builders struggled to meet demand and gain access to building materials. Sales of newly built, single-family homes in November fell 11% to an 841,000 seasonally adjusted annual rate, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Despite the monthly decline, the November rate is 20.8% higher than a year ago. “Though the market remains strong, the pace of sales pulled back in November as inventory remains low and affordability concerns persist as builders grapple with a shortage of lots, labor and building materials,” said NAHB Chairman Chuck Fowke. Regionally, on a year-to-date basis new home sales were up in all four regions: 28.2% in the Northeast, 24% in the Midwest, 16.9% in the South, and 20.5% in the West.