There’s no doubt about it: 2021 was a wild ride. According to a new report by Redfin, numerous real estate records were broken this past year. Record low mortgage rates combined with millions of people still working from home fueled a surge in demand while inventory remained scarce. As a result, 2021 was an epically record-shattering year. Here are 10 records that the real estate market broke in 2021:
- The Average Home Sold for Almost $400k
The defining characteristic of the housing market was massive demand with limited supply, which drove prices to new heights. In June, the average home price in the US peaked at $386,000, a 24.4 percent year-over-year increase.
- Home Supply Dropped to Its Lowest Level Ever
The available housing supply in June was just 1.38 million homes, an all-time low which was 23 percent less than what was available in June of 2020. A lot of factors led to this, including a lack of new construction, low mortgage rates, and a lot of housing markets being flooded by new residents.
- The Fastest Sales Ever
June and July of 2021 saw the fastest housing sales of all time. The average home was on the market for just 15 days, the shortest amount of time ever. Buyers were extremely motivated this year, and pounced the instant a “for sale” sign went up.
- Over 60% of Homes Sold in Two Weeks
In March of 2021, 61.4 percent of homes had accepted an offer within two weeks of going on the market, a new high.
- Over 50% of Homes Sold Above Asking Price
In 2020, it was striking that 29.6 percent of homes sold above asking price. In 2021, that percentage jumped to 56.5 percent thanks to the bidding wars that became the norm this year.
- Mortgage Rates Were the Lowest of All Time
In January of 2021, the average 30-year fixed mortgage rate dropped to 2.65 percent, a record low that spurred a lot of the homebuying in 2021.
- Real Estate Investors Were the Buyers in 1 in 5 Home Purchases
In 2021, 18.2 percent of homes purchased in the US were bought by investors. That’s a massive jump from 11.2 percent just one year earlier. A lot of this increase was due to the buying frenzy of corporate giants like Zillow and Opendoor.
- Demand for Second Homes Doubled
Demand for second homes was up 91% from pre-pandemic levels. This shift was driven by more affluent remote workers who wanted to take advantage of being able to work from a vacation destination. Beach houses and mountain cabins were just as sought after as “forever” homes.
- Nearly One-third of Buyers Were Moving to a New Metro Area
According to Redfin, 31.5 percent of their users were shopping outside of their market in 2021, many in markets they’d never previously considered. This was up from 26 percent a year earlier.
- Luxury Home Prices Jumped
The median sale price of U.S. luxury homes jumped 25.8 percent year over year to $1.025 million in the second quarter of 2021. This jump is even higher than the year-over-year increase of 18 percent across the housing market as a whole.
Looking ahead
The housing market is expected to remain competitive in 2022. With limited inventory, prices will keep growing but experts predict much more moderate increases, closer to about five percent. After the runaway train that was 2021, the real estate market might feel almost normal in 2022.
