As Americans continue to spend more time indoors due to the pandemic, home buying continued to grow across the country in October.
The desire for a home office, classroom space, workout area, a patio, or even extra bedrooms for older relatives and young adults keeps changing home buying behavior across the US.
“Buyers sought housing with more rooms, more square footage and more yard space” said Jessica Lautz, analyst and vice president at the National Association of Realtors (NAR).
This meant higher prices, homes selling in shorter amounts of time, and more sales of pricier homes in October compared to last year, according to new national sales data and a new research report from NAR. Across the nation, Americans who purchased their homes after March were more likely to pay more for a new home purchase and more likely to relocate to the suburbs compared to buyers before the pandemic.
Cheaper condos, expensive houses (relatively)
After a severe decline in buying and selling activity due to Covid-19 between March and May, sales of existing homes rose for the fifth consecutive month in October to a seasonally-adjusted rate of 6.85 million per year. It’s an increase of 4.3% from the prior month and 26.6% higher than a year prior.
While there has been similar growth between the number of single-family and condo sales. The price trends are significantly different. The median single-family home is selling for 16% more now than a year prior, but the median condo or co-op is up only 10.3%. The difference in the trend is even more severe since the beginning of the pandemic after a divergence in May.
This has encouraged the construction of single-family homes, which were up 29.4% in October compared to the same period last year.
Bigger homes, bigger prices, richer buyers
While many Americans have lost their jobs or seen their hours cut this year, the average household income of home buyers rose to $100,800, compared to $94,400 before April.
The pursuit of additional space was also reflected in sales of more expensive homes. Almost one-in-four US home buyers who made a purchase after March paid $500,000 or more. There were twice as many sales exceeding $1 million in October than a year before.