Since last month, a lot has been going on. People started hoarding gas after a ransomware attack on Colonial Pipeline. The price of lumber also rose higher than ever. What hasn’t changed are great mortgage interest rates and people wanting to buy now. Here is the real estate market update for May 2021.
According to the National Association of Realtors, (NAR) there were 1.16 million home units (single family, townhomes, and condos) available for sale in April 2021. This is 20.5% less units available from April 2020 (1.46 million units). It coincides with the short supply of homes available compared to the number of interested buyers. Month over month, the number of units available in April 2021 was a 10.5% more than in March 2021. This is is good news. Most expect this trend to continue as homeowners put their homes up for sale hoping the pandemic effects level off later this year. More new construction developments should also be completed later this year.
Still, the value of homes being sold nationally jumped to 5.85 million, a 33.9% increase from a year ago (4.37 million in April 2020). This corresponds to the rising sale price of homes from last year as buyers must compete and pay more to get their offers accepted. This is also expected to level off later this year as inventory increases and buyers have more options.
Days on Market
Nationally, properties typically remained on the market for 17 days in April, down from 18 days in March 2021 and from 27 days in April 2020. Eighty-eight percent of the homes sold in April 2021 were on the market for less than a month.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 3.06% in April, down from 3.08% in March. The average commitment rate across all of 2020 was 3.11%. Lawrence Yun, NAR’s chief economist, expects the 30-year fixed-rate mortgage to remain below 3.5% in 2021. This month’s real estate market update reflects this.
The Northern Virginia Association of Realtors (NVAR) reported that unlike the yearly national figures, there were 2.28% more home units for sale in April 2021 than there were in April 2020. While the number of detached homes and townhouses fell, there was almost double the number of condos available for sale compared to last year. Compared to March 2021, Northern Virginia also had more units available units for sale, an increase of about 2.5% compared to 10.5% nationally.
Northern Virginia saw a similar increase in the national sales volume. Northern Virginia reported a 34.67% increase compared to the national increase of 33.9%. This amounted to over $5 billion in sales of single family homes, townhouses, and condos. This illustrates the increased value of homes nationally and locally.
Days on Market
In April 2021, homes in Northern Virginia stayed on the marked on average 14 days compared to 13 days in April 2020 (7.69% decrease) and 20 days from March 2021.
WHAT DOES THIS ALL MEAN?
For now, it means the market remains in favor of sellers because:
- There is limited inventory, especially for single family homes. Homes that closed in the last 30 days in Northern Virginia had one buyer paying as much as $805,000 over asking.
- Buyers, especially highly motivated ones, are still trying to take advantage of record interest rates. As an example, a $500,000 home one year ago on a 30-year fixed and 20% down would work out to a monthly payment of about $1882.09 compared to today, which would be around $1699.39. That’s a monthly saving of $182.70 and a savings of over $51,000 over the 30 year term of the loan. Use the mortgage calculator to see your own numbers. Some buyers also have no other option. This includes people relocating for work and those that have been renting for over 5 years and no longer see the benefits of renting. Use this rent vs. own calculator to see if this applies to you. If you are still looking for a home, search HERE.
If you were EVER thought of selling, this is the right time to consider your options. For questions or comments, please CONTACT me.
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