Seasonal Swing Further Sinks Q4 Housing Supply
This article was first published on NerdWallet.com.
The housing market typically follows fairly reliable seasonal trends, but 2020 won’t be known for following predictable patterns.
Every year, colder weather and the holidays accompany a shift downward in home prices as well as the number of homes for sale. In the fourth quarter of 2020, several local markets saw slightly lower list prices from the previous quarter, but with no supply to spare, the annual dip in listings left first-time buyers with even fewer options in the largest metro areas and nationwide.
In NerdWallet’s analysis of home affordability for first-time buyers in the fourth quarter of 2020, homes remained unaffordable across most of the 50 largest metropolitan areas, despite list prices falling just slightly compared with the previous quarter. And with just a single exception — San Francisco — homes became even more difficult to find when compared with one year prior. Together, these factors no doubt made it difficult for first-time buyers to take advantage of low mortgage rates, as they typically have tighter budgets than repeat buyers.
Still, first-time buyers accounted for about 31% of sales in the fourth quarter, according to the National Association of Realtors, proving some are battling the market headwinds, and winning.
Localized listing price dip makes a few metros more affordable
A very slight seasonal fourth quarter price dip led to increased affordability in some metro areas. Homes were listed at 5 times first-time buyer income, on...