Low interest rates drive home sales
Home sales in the US rose surprisingly at the end of 2020 thanks to low interest rates. The sales of existing houses rose in December to the previous month by 0.7 percent to an adjusted annual rate of 6.76 million, as the real estate broker association NAR announced on Friday. Economists polled by Reuters, however, had expected a decline to 6.55 million.
Sales of existing homes, which make up the majority of total home sales, climbed a good 22 percent year-on-year in December and were at 5.64 million in 2020, the highest level since 2006.
“The real estate market continues to benefit from the low interest rate environment, regardless of the still weak situation on the US labor market,” said Helaba expert Ralf Umlauf. “Because the sales figures are still well above the pre-crisis level.”
The market is benefiting from low mortgage rates, but rising house prices could slow the pace in the coming months. In the Corona crisis, Americans are increasingly moving to the outskirts or even the countryside. Because many people are currently working from home anyway and many schools are teaching online.
In 2020 as a whole, house prices rose by nine percent, in December alone by 12.9 percent.
