From super-low mortgage rates to sky-high home prices, 2021 has seen a number of real estate records fall. The housing market continually outdid itself this year, seeming to set new records every month thanks to a home buying rush that started last year.
“The real estate market in 2021 was a continuation of the strong momentum carried over from 2020. Mortgage rates hovering at near-record lows fueled demand,” says Lawrence Yun, chief economist for the National Association of Realtors.
Low interest rates weren’t the only fuel to the housing market fire. As the country slowly emerged from COVID-19 lockdowns, buyers redefined “the perfect home” and expanded the lengths they would go to find it.
“The pandemic and the work-from-home flexibility changed people’s desire of what is the right home – whether it was a larger home with space for a home office or moving further out from expensive areas to seek greater affordability,” says Yun. “This change in preference also fueled housing demand.”
The price of homes reached new highs as buyers competed for a limited number of available homes. For homeowners though, it was a bonanza with new highs in home equity and record profits from sales.
As the year draws to a close, here’s a look at some of the new housing records set in 2021.
1. The rate on a 30-year mortgage bottomed early
The average rate on a 30-year fixed-rate mortgage hit a record low of 2.65% on January 7, according to Freddie Mac.
The previous record of 2.66% was set just two weeks earlier, on December 24, 2020. In fact, January’s low capped an almost year-long streak of 16 new lows that began in March 2020, when the 30-year rate dropped to 3.29%. Since January, rates have risen but remain low. As of December 23, the current 30-year rate is 3.05%
Prior to the pandemic, the all-time low was 3.31%, set in 2012.
2. Inventory started the year low — and stayed there
The year started with a record low 1.04 million homes for sale. That represented just a 1.9 month supply at the pace of sales at the time. It was the lowest housing inventory since NAR started keeping track in 1999 and down from 1.07 million units in December 2020.
Since then, inventory has improved slightly but is nowhere near the six-month supply considered healthy. At the end of November, the housing inventory stood at just 1.1 million units — a 2.1 month supply.
3. Home sale prices appreciated like crazy
Annual home price growth reached a new high in October, increasing 18% year-over-year, according to housing data provider CoreLogic. It’s the largest margin of growth in the 45-years CoreLogic has been tracking.
While the October data is the most recent information available, there …….