This year’s real estate market will certainly be one to remember, continuing to break records and challenge what many investors thought possible in the housing market. Here’s a look at four key areas that are fundamentally defining the market:
1. Housing Market Recovery.
The economy was intentionally put on pause this spring in response to the COVID-19 health crisis. Many aspects of the common real estate transaction were placed on hold at the same time. Thankfully technology and innovation helped the industry power forward, and business gradually ramp back up as shelter-in-place orders were lifted. The result? Total transformation of the market from rock-bottom lows to exceptional highs.
2. Record-Breaking Mortgage Rates.
Historically low mortgage rates are another 2020 game-changer. The average rate reached an all-time low on multiple occasions this summer, and continues to hover in record-low territory. Today’s low rates are one of the big motivating factors bringing buyers back into the market.
3. Continued Home Price Appreciation.
One of the key drivers of home price appreciation this year is historically low inventory. Although sellers are slowly making their way back into the game, buyers are scooping up homes faster than they’re coming up for sale. This is a classic supply and demand scenario, forcing home prices to rise.
4. Increasing Affordability.
Even as home prices continue to rise, affordability is working in favor of today’s homebuyers. Rates this low are off-setting rising home prices, which increases buyer purchasing power – an opportunity not to be missed for investors.
Bottom Line. With mortgage rates hitting historic lows, home prices appreciating, affordability rising, and the market recovering like no other, 2020 has been quite a year for real estate investors– one we’ve never seen before and perhaps may never see again.