The United States housing market experienced a significant downturn in 2020 as a result of the COVID-19 pandemic. This downturn led many experts to believe that a further decline in home prices was imminent. However, recent data indicates that the worst of the home price declines may already be behind us.

According to the latest data from the National Association of Realtors (NAR), home prices across the country are still increasing, but at a slower pace than in previous months. In January 2021, the median home price was $303,900, which represents a 14.1% increase from the previous year. However, this is a slight decrease from the 14.6% increase seen in December 2020.

One factor contributing to the slowdown in home price growth is the increase in the number of homes on the market. In January 2021, there were 1.04 million homes for sale, an increase of 2.7% from the previous month. This increase in supply has helped to stabilize the market and has given buyers more options to choose from.

Another factor contributing to the stabilization of the housing market is the low mortgage rates. The average rate for a 30-year fixed mortgage in February 2021 was 2.81%, which is only slightly higher than the record-low rate of 2.65% seen in January 2021. These low rates have encouraged buyers to enter the market and have helped to offset some of the affordability challenges caused by the increase in home prices.

While it is still too early to say for sure whether the worst of the home price declines is behind us, the recent data is certainly encouraging. With low mortgage rates and an increase in the number of homes on the market, the housing market is showing signs of stabilization. This is good news for both buyers and sellers, as it means that the market is becoming more balanced and less volatile.

In conclusion, the housing market experienced a significant downturn in 2020, but recent data indicates that the worst of the home price declines may already be behind us. With low mortgage rates and an increase in the number of homes on the market, the market is becoming more stable and balanced. This is good news for both buyers and sellers, and it suggests that the market will continue to improve in the coming months.

Some Highlights

  • While home prices vary by local area, they’ve already hit their low point nationally, and now they’re starting to rise again.
  • Last July, prices started to decline, but around February, they began climbing back up.
  • If you put your plans to move on hold waiting to see what would happen with home prices, let’s connect to discuss if now’s the right time to jump back in.