A Review of the Housing Market Report Q1 2021
As a REALTOR®, you know just how important it is to stay on top of the latest trends. Whether it’s taking the time to take classes on the latest relevant skills or brushing up on the trends affecting your local territory. This week we’re focusing on the latter with the latest housing market report from NYSAR. NYSAR’s website dedicates an entire section to updated reports that follow housing market trends throughout the year. For a short recap of the current trends we’re seeing in 2021, you can find NYSAR’s “The Skinny Video” here. You can find additional resources on NYSAR’s website as well that will help keep you up to date on the latest news and trends.
According to NYSAR’s latest report, the first quarter of the year tends to be a good indicator of what trends throughout the remainder of the year will look like. As the weather gets warmer, we’re continuing to see buyer demand climb while inventory remains low. The report states:
“As the rollout of COVID-19 vaccines continues to accelerate and the economy slowly reopens, strong buyer demand is likely to remain even in the face of falling housing affordability. Existing home seller and new construction activity remains well below levels necessary for housing supply to come into balance with demand, so expect the soaring housing market to continue unabated in the coming months.”
Diving deeper into the tail end of Q1 2021, NYSAR’s March report explains what these trends mean for homebuilders and construction activity:
“Normal spring increases in sales activity, coupled with relaxing COVID-19 policies, created a very busy March real estate market as buyer demand continued largely unabated in the face of rising home prices and mortgage rates. Existing home seller and new construction activity continue to remain below levels necessary to bring the market back into balance, pointing to a busy and competitive buyer market in the coming months.
New Listings were up 26.9 percent to 17,662. Pending Sales increased 59.1 percent to 14,757. Inventory shrank 30.1 percent to 36,739 units.
Prices moved higher as the Median Sales Price was up 30.4 percent to $365,000. Days on Market decreased 14.1 percent to 73 days. Months Supply of Inventory was down 38.3 percent to 2.9 months.
While many homebuilders are working to increase their activity, the cost of lumber and other materials and a backlogged supply chain continue to limit new home construction and have increased costs substantially. New methods of construction, including 3d printed homes, could speed construction and reduce costs in the future, but realistically are several years away from making a measurable impact in the market.”
February’s report focused on mortgage rates in comparison to the year prior and how COVID-19 has affected current homeowners:
“Mortgage interest rates ticked a bit higher in February, but remain below their February 2020 levels. Interest rates may rise a bit further in coming weeks, but according to Freddie Mac chief economist Sam Khater, “while there are multiple temporary factors driving up rates, the underlying economic fundamentals point to rates remaining in the low 3 percent range for the year.” With rates still at historically low levels, home sales are unlikely to be significantly impacted, though higher rates do impact affordability.”
Last but not least, January’s report speaks to trends from December and how these trends will likely affect new construction in 2021:
“January started off strong for the housing market, with healthy buyer demand and strong market fundamentals. A robust increase in housing starts in December points to an active year for new construction, but higher material costs, especially lumber, and a limited supply of buildable lots will temper the number of new units.”
NYSAR’s website hosts housing market reports as far back as 2018! In our due diligence as REALTORS®, our knowledge of the current market is a direct reflection of our skill, and helps to showcase our expertise to our clients. You can learn more about the UCBR here. Cheers!