On average, American homes are remaining on the market for one week — marking the fastest pace of sales since the 1980s.
According to the National Association of Realtors’ fortieth annual Profile of Home Buyers and Sellers survey — which tracked the behavior of buyers between July 2020 and June 2021 — the real estate market currently favors sellers:
Among repeat home buyers and home sellers over the last year, a key factor for moving was the desire to live closer to family and friends, while an equally important motivator was the need for more space or a bigger home. Sellers as a whole were able to benefit in these transactions, typically earning their full asking price, and selling in one week.
Other trends identified by the organization point to the same conclusion:
For all sellers, the most commonly cited reason for selling their home was the desire to move closer to friends and family (18%), that it was too small (17%), and the neighborhood had become less desirable (11%).
For recently sold homes, the final sales price was a median of 100% of the final listing price. Only 26% of all sellers offered incentives to attract buyers, a drop from 46% of all sellers last year.
“Buyers moving quickly during the pandemic, coupled with all-time-low inventory, led to a decline in time on market to the shortest ever recorded, which was just one week,” National Association of Realtors executive Jessica Lautz explained.
As The Daily Wire has previously reported, several macroeconomic trends are behind historically high real estate prices.
For one, Federal Reserve Chair Jerome Powell admitted to lawmakers earlier this year that asset purchases by the central bank are contributing to housing demand.
“Housing prices are going up, as you mentioned, around 15%. This is a very high rate of increase,” Powell explained to Sen. Pat Toomey (R-PA) during a congressional hearing. “A number of factors are contributing — monetary policy is certainly one of those factors. There are also other factors: people have very strong balance sheets, so they’re able to make down payments. There are also supply factors that are constraining the supply, at least temporarily.”
Powell added that mortgage purchases are “somewhat more supportive of housing” than other asset purchases — though that is “not their intent.”
For another, there are not enough construction workers to fill housing demand. The Associated Builders and Contractors — a trade group representing the non-union construction sector — confirmed earlier this year that shortages in homes are linked to the distorted labor market.
“Construction spending is likely to reach $1.45 trillion in 2021, up 1.3% from 2020,” the group said in a statement. “Under this scenario, employment demand increases by 430,000 this year from actual employment of 7,829,000 in 2020. A higher growth rate scenario could boost the number of additional construction workers needed in 2021 to nearly 1 million.”
Indeed, the construction labor shortage pushed Zillow, an online real estate marketplace, into halting its recent home-buying spree.
“We’re operating within a labor- and supply-constrained economy inside a competitive real estate market, especially in the construction, renovation and closing spaces,” Zillow chief operating officer Jeremy Wacksman said. “We have not been exempt from these market and capacity issues.”