The start of the year has seen a resurgence in real estate activity, as more home buyers enter the market. With prices bottoming out and interest rates staying low, now may be the perfect time for those looking to buy a home. The question is, is this the real estate bottom?
The number of home sales increased in January
Data from the National Association of Realtors shows that January 2021 saw a spike in home sales across the country. This surge marked the first year-over-year increase since August 2020, when home sales had been decreasing for months. Compared to January 2020, home sales were up by more than 11%.
This increase in home sales was driven by rising demand, especially among first-time homebuyers. Interest rates have remained at historically low levels and many buyers are taking advantage of the opportunity to buy a home while they can. Low inventory has also contributed to the increase in sales, as homes are quickly being snapped up as soon as they are listed.
The average price of a home increased as well
The average price of a home in January 2021 was up from the previous month, signaling an upward trend in home prices across the country. This is likely due to the limited inventory of homes available on the market, as well as the fact that there are more buyers than sellers.
In addition to the increase in average home prices, the median sale price of a home increased by 6.2% year-over-year in January. This marks a strong start for the year in terms of home prices, as the median sale price has been rising steadily over the last several months.
It’s worth noting that some states are seeing stronger price gains than others. For example, in California, the median sale price was up by 9.7% year-over-year in January. And in Florida, the median sale price rose by 8.1% compared to January 2020.
Overall, it’s clear that the housing market is rebounding after a slow end to 2020. The increase in average home prices shows that more homebuyers are jumping back into the market, as they look to take advantage of low interest rates and find their dream homes.
The inventory of homes for sale decreased
According to the latest report from the National Association of Realtors, the inventory of homes for sale in the United States decreased by 7.3% in January. This marks the ninth consecutive month of declining inventory levels. This trend is being driven by the fact that more and more people are buying homes, which reduces the number of available homes for sale.
The decrease in inventory could be a sign that we are approaching a “real estate bottom”. As more buyers enter the market, sellers become more motivated to put their homes on the market, which would increase the inventory of homes for sale. This could potentially lead to a recovery in the real estate market.
However, it’s too early to tell if this trend will continue. It’s important to keep an eye on housing market trends over the coming months and years to see how they develop. If the inventory of homes continues to decrease, then it could be a sign that we are heading towards a real estate bottom.
The trend is being driven by first-time homebuyers
The real estate market has seen a significant surge in activity due to first-time homebuyers jumping back in. These buyers are being driven by historically low mortgage rates, improved affordability, and an increase in economic stability. As the year kicks off, these buyers have been taking advantage of the current market conditions to get a great deal on their first home.
In fact, according to the National Association of Realtors (NAR), the majority of home purchases over the last several months have been made by first-time buyers.
The NAR’s chief economist, Lawrence Yun, said that first-time buyers now account for around 60% of all sales.
This is up from 57% from the same time last year and represents the highest level since 2006.
The influx of first-time homebuyers has had a noticeable impact on the market. With more buyers in the mix, it has pushed up prices and brought down the number of homes available for sale. This trend is expected to continue as more and more first-time buyers take advantage of the current conditions.
For those looking to make their first home purchase this year, it’s important to do your research and understand what you can realistically afford. With interest rates at historic lows, it’s possible to get a great deal if you’re willing to put in the work. By doing so, you can set yourself up for a successful real estate experience.