Home sales have best year since 2006 with record-low mortgage rates

Housing inventory hits historic lows

The housing market had its hottest year in over a decade fueled by record-low mortgage rates and historically thin inventory, even as the economy was hit by the coronavirus pandemic.

Sales of existing homes were 5.64 million in 2020, the best in 14 years, rising 5.6% from the prior year and the most since “before the Great Recession,” according to the National Association of Realtors. Last month, sales saw an uptick of 0.7% to 6.76 million, while total sales jumped 22.2% from a year ago.

ANOTHER $1,400 STIMULUS CHECK COULD BE COMING YOUR WAY

TickerSecurityLastChangeChange %
TOLTOLL BROTHERS54.04+0.62+1.16%
LENLENNAR82.60-0.37-0.45%
XHBSPDR SERIES TRUST SPDR S&P HOMEBUILDERS ETF63.35+1.31+2.11%

"Home sales rose in December, and for 2020 as a whole, we saw sales perform at their highest levels since 2006, despite the pandemic," said Lawrence Yun, NAR's chief economist. "What's even better is that this momentum is likely to carry into the new year, with more buyers expected to enter the market."

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Courtesy: Freddie Mac

Mortgage rates continue to hover at record lows, helped by the Federal Reserve's ongoing pledge to keep interest rates near zero.

A 30-year fixed-rate mortgage sits at 2.77%, as tracked by Freddie Mac.

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The combination pushed prices up 12.9% with the average home sale being $309,800.