As the housing market continues to rebound from the effects of the global pandemic, home prices are continuing to climb as demand for housing remains high. The latest figures from the National Association of Realtors (NAR) show that existing home sales increased by a whopping 21.8% in March 2021, compared to the same month last year.
The surge in sales is being driven by a combination of factors, including historically low mortgage rates and an increase in the number of people looking to buy a home. The NAR reports that the average 30-year fixed-rate mortgage fell to 3.17% in March, down from 3.31% in February. This is the lowest rate since record-keeping began in 1971 and has made it easier for buyers to qualify for a loan and purchase a home.
At the same time, the number of people looking to buy a home is at an all-time high. The NAR reports that the number of buyers searching for homes is up 20% from the same time last year, and that the number of buyers actively looking to purchase a home is up 11%.
The combination of high demand and low mortgage rates has pushed home prices up. The latest figures from the NAR show that the average home price rose by 11.3% in March, compared to the same month last year. This is the highest year-over-year increase since October 2017, when the average home price rose by 12.8%.
The rising home prices are good news for sellers, who are seeing their homes sell quickly and for more money than they expected. However, the rising prices are also making it harder for buyers to find an affordable home. Many buyers are being priced out of the market, and those who are able to purchase a home are often forced to stretch their budgets to do so.
The good news is that the housing market is expected to remain strong in the coming months. The NAR forecasts that existing home sales will continue to increase through the rest of 2021, and that the average home price will remain high. This means that buyers should expect to continue to face stiff competition and high prices, but that the housing market remains a good option for those looking to purchase a home.