U.S. home sales in 2020 surged to their highest level in 14 years, fueled by ultralow interest rates and a pandemic that sent buyers scrambling for more spacious homes to accommodate remote work.
Robust home sales in the second half of the year surprised many economists while offering a rare bright spot for an economy run aground by closed businesses and mounting job losses during the Covid-19 pandemic.
Pandemic-driven job losses were concentrated in lower-paying industries, while households with higher pay and the resources to buy a new home weathered the downturn better. The pandemic prompted many of them to leave big cities for suburbs or smaller towns, while record-low borrowing rates made the decision to trade up easier. Once shelter-in-place restrictions eased, sales took off in June and have rarely flagged since then.
“It’s totally because of the pandemic,” said Brittany McCreary, who with her husband last month bought their first home, a four-bedroom stone farmhouse, in York, Pa., after leaving the Chicago area. “We’re glad we’re not renting anymore. We always wanted to buy.”
Existing-home sales rose 0.7% in December from November to a seasonally adjusted annual rate of 6.76 million, the National Association of Realtors said Friday. The December sales marked a 22% increase from a year earlier.