Home Prices Reach 15-Year High in 2021

Home prices reached their highest point in 15 years last year. According to the National Association of Realtors (NAR), existing home sales hit 6.12 million in 2021.

This is despite a drop in sales in December, which the NAR says was due to lack of inventory rather than lack of demand. “Sales for the entire year finished strong, reaching the highest annual level since 2006,” says Lawrence Yun, chief economist at the NAR. Existing home sales data includes single-family homes, co-ops and condos that were owned and occupied before going on the market.

“Existing home prices not only grew rapidly last year,” says Carol D. Calamari, Sales Associate at ERA Justin Realty, “they also sold faster than ever. Many were under contract in less than a week.”

Low mortgage rates led to increased demand from all types of buyers in 2021, including both vacation property investors and first-time homebuyers.

“Millennials were some of the biggest buyers in the final months of 2021,” says Calamari, “trying to get in before mortgage rates go up.”

The NAR expects existing home sales to slow down by the second half of 2022 due to rising mortgage rates, the NAR says recent employment gains and stricter underwriting standards will keep the market from crashing.

Jennifer Darby Metzger, Broker/Co-Owner of ERA Justin Realty agrees. “Mortgage rates are expected to remain below 4% through the end of 2022,” says Darby Metzger, “that is still historically low and will keep the housing market going strong.”

The NAR predicts housing inventory to start improving by 2023 as kinks in the supply chain ease up for contractors. “Home builders have already made strides in 2022 to increase supply,” says Yun, “but reversing gaps like the ones we’ve seen recently will take years to correct.”

If you’re ready to buy a home, Carol D. Calamari or any of the Sales Associates at ERA Justin Realty can help you find the home of your dreams, even in the tightest markets. Contact us by calling 201-939-7500.