2021 on track to have highest home sales in 15 years

While the housing market in the U.S. has plateaued somewhat in recent months, the year has been an extremely active one overall. Recent data from the National Association of Realtors indicates that if current trends continue, 2021 will have the highest number of home sales for any year since 2006.

The NAR prediction is based on the most recent housing data from October. Last month, existing home sales increased from September by 0.8%. The seasonally adjusted rate of home sales for the year has been 6.34 million and is on track to be the highest recorded number in 15 years.

Things are not quite as frenzied as they have been at other times in the last two years, but it is certainly significant that sales rose from September to October at a time when economists would historically predict a seasonal decline.

The continuation of low interest rates has driven a lot of the continued buying activity, while low inventory has made for ever-increasing sales prices. The inventory in October 2021 was down 12% from October 2020. As of the end of October 2021, there was a 2.4 months supply of inventory.

High levels of competition remain most persistent at lower price ranges. What would traditionally been thought of as starter homes are now much more likely to be swept up by all-cash offers from investors. The NAR reported that in October of this year, 24% of homes were purchased in cash, up from 19% in the same period last year.

To see that the housing market is still in a very unusual and competitive place, one need look no further than such white-hot markets like Scottsdale, Arizona. In particularly competitive markets, the problems of low supply and high demand continue to be very much in effect.

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