While Low Mortgage Rates Drive Home Prices to Record Levels
Everyone knows that the residential real estate market is hot; but not all buyers are happy about it. First-time buyers have less inventory to choose from than at any other time in recent memory.
The first-time buyer niche feels like it is getting shut out of this seller-sell-all surge. The number of first-time homebuyers fell in September 2020 to a market share of just 31% of all purchases. This reflects a 2% drop from August 2020, which reported 33%.
This reverses the trend seen back in Q4 2019 when first-time homebuyers represented 39% of all buyers in the single-family housing market, and 55% of all purchase money borrowing. For 2019, first-timers comprised a total of 38% of all single-family purchases.
The Number of Renters is Increasing
And as the number of homes available for sale fell precipitously from 2019 by 43% in the state of New Jersey, the renter population has become more than 100 million strong after a decade of sustained growth, as the number of American renters reached 108.5 million in 2018, up from 99.4 million in 2010.
The National Association of Realtors reported that the sales of existing homes increased by 9.4% in September, representing a higher-than-expected rate, which translates into 6.54 million units. Sales of existing homes climbed 20.9% on an annual basis.
Lower mortgage rates are also contributing to the accelerated rise in home prices. The annual mortgage rate this week fell to another new low.
Mortgage rates in 2020 reflected a 1% lower average rate than rates in 2019.
September Sales by Region
Northeast sales increased 16.2%, to 860,000 units, with a median price of $355,000, up 17.8%
Midwest sales increased 7.1%, with the median price climbing to $243,000, up 14.8%
South sales increased 8.5%, with the median price hitting $267,000, up 13%
West sales increased 9.6%, with median price coming in at $471,000, up 17.1%
Sales of new homes skyrocketed by 43% over 2019.
Vacation and resort homes sales also reflected a huge increase, climbing 34% annually as the pandemic drove people to less densely populated areas.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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