While the U.S. traditional lower income households were affected by COVID-19 badly, 10.74 millions unemployment population in December 2020, higher income households intended to purchase real estate for more sustainable investments and bigger home office due to popular remote working.
Sales of existing homes in the United States rose 0.7 percent in December, pushing the entirety of 2020 to a pace not seen in 14 years and providing one of the few bright spots for a US economy mired in a global pandemic.
Rising sales in the final month of the year lifted activity to a seasonally adjusted annual rate of 6.76 million units in December, the National Association of Realtors (NAR) reported Friday. Sales have been boosted by record-low mortgage rate. “Home sales rose in December, and for 2020 as a whole, we saw sales perform at their highest levels since 2006, despite the pandemic,” NAR Chief Economist Lawrence Yun said. “What’s even better is that this momentum is likely to carry into the new year, with more buyers expected to enter the market.”
Homebuilders have struggled to keep up as sales of new and existing homes boomed, with inventory dropping to 1.07 million units, 16.4 percent lower than November and down 23 percent from the year-ago period. Unsold inventory is at a 1.9-month supply, NAR said, an all-time low.
Joel Kan of the Mortgage Bankers Association warned the rising prices and tightening inventory could cut into future sales. “More acute affordability challenges will emerge if inventory stays this tight and home-price growth continues to accelerate,” he said in a statement. “This in turn would be especially challenging for first-time homebuyers, who make up a third of all home sales.”
In federal level, new President Joe Biden has proposed few policy to improve the U.S. housing environment, such as follow:
- proposed a $15,000 tax credit for first time home buyers
- seek to eliminate 1031 exchange rules
- remove the SALT cap
- decrease in Federal Estate exemption
- invest $640 billions for housing affordable project
- further fair housing rules and HOME acts
CIMA law group follows closely policymaking process in U.S. real estate industry. Follow us for more up to date news.
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