No doubt, 2020 has been a uniquely challenging year. With unemployment still above pre-pandemic levels, the country coming to terms with longstanding racial inequities, Americans worrying about natural disasters and coming off a contentious national election, and the COVID-19 pandemic still raging, people are searching for reasons to feel gratitude this Thanksgiving.

The housing market has emerged as an economic bright spot. While the nation continues to feel the widespread effects from 2020’s turmoil, here are a few things the real estate industry can be grateful for this year.

1. Booming home sales. Overall, real estate professionals have been busy. Homebuying activity is at its highest level since 2006. Defying high unemployment and an economic recession, the housing market has surged during the COVID-19 pandemic. Existing-home sales in October were 27% higher than a year ago, new-home sales were 32% higher, and pending home sales or contract signings in September jumped 20.5% annually. “This winter may be one of the best winters for sales activity,” Lawrence Yun, NAR’s chief economist, said during last week’s virtual 2020 REALTOR® Conference & Expo. “It won’t match summer or spring sales numbers, but on a winter-to-winter comparison, this could be one of the best breakout years just based on the fact that pending contracts are at such a higher level.” Mortgage applications, up 20% year over year, reflect buyers in the pipeline,  ready to buy. The downside: Buyers are in a frenzy to compete for the limited housing stock; 72% of homes that sold in October were on the market for less than a month, NAR’s data shows.

2. Record low mortgage rates. Home buyers are locking in some of the lowest mortgage rates ever in history. Last week, for the 13th time this year, the 30-year fixed-rate mortgage set a record low, averaging 2.72%, according to Freddie Mac. NAR’s Yun predicts that mortgage rates will stay low into 2021, averaging 3.1% for all of next year. “These ultra-low mortgage rates significantly lower mortgage payments, making housing more affordable than a year earlier in many areas,” even with prices rising, writes Nadia Evangelou, a research economist, on NAR’s Economists’ Outlook blog. For example, in the Washington, D.C., metro area, home prices have jumped nearly 12% compared to a year earlier, Evangelou notes. However, the monthly payment on a 30-year fixed-rate mortgage is lower than a year ago, averaging $1,820.

3. Seller equity. Home sellers are getting a boost financially from housing appreciation. The median existing-home price for all housing types was $313,000 in October—a 16% increase from a year ago. Sixty-five percent of 181 metro areas NAR recently tracked have reported double-digit price gains compared to a year ago.

That means home owners who haven’t taken a financial hit from the pandemic are feeling richer. In the third quarter, 16.7 million residential properties in the U.S., or 28.3% overall, were considered “equity rich,” according to a report from ATTOM Data Solutions, a real estate research data firm. A property is considered equity rich when the property owner has at least 50% equity in the home. “Homeowner equity in the third quarter added another pebble to the pile of markers showing that the U.S. housing market continues to defy the broad downturn in the economy this year,” said Todd Teta, chief product and technology officer for ATTOM Data Solutions. “Home prices keep rising, boosting the balance sheets of homeowners throughout most of the country. … The market is strong and homeowners remain in a position to benefit.”

4. Technology. With people forced to keep their distance during the pandemic, technology became real estate pros’ ally in keeping transactions moving. Nick Bailey, chief customer officer at RE/MAX LLC, said during last week’s REALTOR® Conference & Expo that the average real estate transaction takes 181 steps from beginning to end, and technology has increasingly responded to those steps. During state shutdowns earlier this year, real estate professionals increasingly relied on virtual and 3D tours, videoconferencing, augmented reality, automation, artificial intelligence, and remote online notarizations, Jeb Griffin, NAR’s director of strategy and innovation, said during the conference. “Technology is playing a more active role through the buying and selling cycle, and agents are playing an even bigger role to consumers who [have] less access to homes in person [due to the pandemic],” Griffin said. The future now requires “taking the traditional way of doing business and augmenting it with new ways that will allow you to serve customers in a variety of ways—and on their terms,” added Andy Ambrose, DocuSign practice lead director at DocuSign Notary. (Read more: Tech Tools to Help Pros Thrive During the Pandemic.)

5. New priorities. “The coronavirus without a doubt led home buyers to reassess their housing situations and even reconsider home sizes and destinations,” Jessica Lautz, vice president of demographics and behavioral insights for NAR, said about recent findings from the “2020 Profile of Home Buyers and Sellers.” “Buyers sought housing with more rooms, more square footage, and more yard space, as they may have desired a home office or home gym. They also shopped for larger homes because extra space would allow households to better accommodate older adult relatives or young adults that are now living within the residence.” (Read more: NAR Survey Reveals 14 Home Buying, Selling Trends Since the Pandemic.)

6. Affirmation of your value. As Americans reevaluated what they wanted from a home, they increasingly relied on real estate agents to guide them through purchase and sales transactions. Eighty-eight percent of buyers reported using an agent to purchase their home, and 89% of sellers used an agent to help with their sale, according to NAR’s survey. “We are all in unknown territory with this pandemic, so it’s no surprise that more buyers than ever turned to agents to help them navigate through some of the uncertainties and one of the most complex, competitive markets any of us have ever seen,” said NAR’s immediate past president Vince Malta when the Home Buyer and Seller Profile was released.

7. The sanctity of home. “Nothing feels more precious this year than the safety of our homes,” Shannon McGahn, NAR’s chief advocacy officer, told REALTOR® Magazine in addressing advocacy efforts of the association this year, “and we believe all Americans should have equal opportunity to a home of their own.”

More buyers are being drawn to new-home construction during the pandemic. Construction of single-family homes last month soared to the highest level since the spring of 2007. New-home construction is up 8.6% from a year ago, the Commerce Department reported last week.

The top performing new-home markets in October were Raleigh. N.C.; Denver; and Jacksonville, Fla., according to Zonda’s New Home Pending Sales Index, which reflects the number of new-home sales contracts signed nationwide. (Zonda is a research firm formerly known as Meyers Research.) Builders in these markets are selling homes at a quick pace and also pulling an increasing number of new permits, which indicates future construction.

The local economies in Denver and Jacksonville are outperforming the national average, with an estimated 60% and 65% of all the jobs lost in March and April now recovered, respectively, according to Zonda’s report. For comparison, the national average is 54%.

“As COVID-19 hospitalizations rise and parts of the country start shutting down again, housing plays an even greater role in our life,” says Ali Wolf, chief economist at Zonda. “Looking into 2021, however, some builders are expressing caution over the sustainability of the current growth rates due to limited inventory and some affordability concerns.”

The largest upticks in new-home sales in October, according to Zonda’s Pending Sales Index, are in:

1. Raleigh, N.C.: 81.7% (year-over-year gain)
2. Denver: 69.3%
3. Jacksonville, Fla.: 68.4%
4. Atlanta: 66.4%
5. Washington, D.C.: 58.9%
6. Austin, Texas: 56.5%
7. Dallas: 43.7%
8. Tampa, Fla.: 39.7%
9. Philadelphia: 38.6%
10. Houston: 37.7%
11. Seattle: 32.8%
12. San Antonio: 32.4%
13. Salt Lake City: 32.3%
14. San Francisco: 31.8%
15. Orlando, Fla.: 31.7%
16. Phoenix: 28.8%
17. Las Vegas: 25.6%
18. Los Angeles/OC: 24.4%
19. Cincinnati: 15.9%
20. New York: 5%

Read about how the existing-home market is faring: Homes Sales Are on Fire, Up 27% From a Year Ago

Nearly half of more than 2,000 Americans recently surveyed say they plan to move soon to reduce living expenses, according to a new survey from LendingTree. Forty-six percent of respondents say they plan to relocate within the next year.

The pandemic has motivated more Americans to consider a move. Sixty-four percent of remote workers say they are considering a move. Many consumers say the COVID-19 outbreak also has led them to change their living situation.

“The economic crisis has adversely affected the finances of many Americans,” says Tendayi Kapfidze, LendingTree’s chief economist. “Even those who kept their jobs and added to savings, via stimulus and spending less due to staying home, are likely worried about the stability of their financial position.”

Also, respondents say they’re now more motivated to move to be near family or friends (14%) or have family and friends move in with them (10%).

They also desire several home features and amenities that they didn’t previously consider important. The three most common are a yard to enjoy the outdoors without shared space, a larger kitchen since they’re dining out less, and an office space for remote working or distance learning, according to the LendingTree survey.

For the fifth consecutive month, existing-home sales continued to be resilient in the face of the pandemic, climbing nearly 27% compared to a year ago, the National Association of REALTORS® reported Thursday.

Also reported this week, construction of single-family homes soared to the highest pace since the spring of 2007, as more buyers turned to the new-home market to find homes for sale.

Buyers continue to find higher prices and quick sales. Median existing-home prices continued rising last month, up nearly 16% compared to a year ago. The median existing-home price was $313,000 in October (a year ago prices were at $271,100), NAR reports.

“Considering that we remain in a period of stubbornly high unemployment relative to pre-pandemic levels, the housing sector performed remarkably well this year,” says Lawrence Yun, NAR’s chief economist.

Existing-home sales—completed transactions that include single-family homes, townhomes, condos, and co-ops–reached a seasonally-adjusted annual rate of 6.85 million in October, an increase of 4.3% from September. Total housing inventory continued to decline—down nearly 20% from a year ago—reaching a 1.42 million supply. That represents just a 2.5-month supply, a record low, at the current sales pace, NAR reports.

Listed homes are selling fast. Seventy-two percent of homes that sold in October were on the market for less than a month.

“The surge in sales in recent months has now offset the spring market losses,” Yun says. “With news that a COVID-19 vaccine will soon be available, and with mortgage rates projected to hover around 3% in 2021, I expect the market’s growth to continue into 2021.” Yun predicts that existing-home sales will increase by 10% to 6 million in 2021.

Meanwhile, new-home construction is also seeing an uptick in demand. Compared to September, single-family construction increased 6.4% in October to a 1.18 million seasonally adjusted annual rate, up 8.6% from a year ago, the Commerce Department reported Wednesday. The biggest gains for single-family and multifamily starts were in the Midwest, up 15.5% annually in October, followed by a 7.5% gain in the South and a 4.7% increase in the West. The only region to post a decrease in new-home construction last month was 6.4% annually in the Northeast.

“Faced with many uncertainties in 2020, the real estate industry has been able to meet surprisingly strong home buying demand and help lead our country’s economic recovery,” says NAR President Charlie Oppler. “As we continue to help consumers secure housing and property, we will also remain vigilant in working to expand housing options, equality, and affordability for all who are entering the marketplace.”

Regional Breakdown

All four major regions of the U.S. reported month-over-month and annual gains. The Midwest saw the greatest monthly increases. But median home prices increased at double-digit rates in each of the four major regions compared a year ago. Here’s a breakdown of home sales from across the country in October:

• Northeast: existing-home sales increased 4.7%, reaching an annual rate of 900,000—up 30.4% from a year ago.
  Median price: $356,500, up 20.2% from a year ago.
• Midwest: existing-home sales increased 8.6% annually to a rate of 1.64 million, up 28.1% from last year’s levels.
  Median price: $243,500, up 16.7% from a year ago.
• South: existing-home sales rose 3.2% to an annual rate of 2.91 million in October, up 26.5% from a year ago.
  Median price: $272,500, up 15.7% from a year ago.
• West: existing-home sales rose 1.4% in October to an annual rate of 1.4 million, a 22.8% uptick from a year ago.
  Median price: $457,800, up 15.1% from a year ago.

Additional Housing Stats From October

Here are more highlights from NAR’s latest existing-home sales report:

• Days on the market: Properties typically remained on the market for 21 days in October, down from 36 days in October 2019.
• First-time buyers: First-time buyers comprised 32% of sales in October, up from 31% a year ago.
• Investors and second-home buyers: Individual investors or second-home buyers purchased 14% of homes in October, equal to a year ago. Investors and second-home buyers tend to account for a bulk of all-cash sales, which were unchanged from a year ago comprising 19% of transactions.
• Distressed sales: Foreclosures and short sales represented less than 1% of sales in October, down from 2% a year ago.

© National Association of REALTORS®

Concerns in the real estate industry are mounting as more states move toward tougher coronavirus restrictions—including lockdowns in New Mexico and Oregon. As COVID-19 cases surge to a record high nationwide, at issue is whether states will deem real estate an essential service if they reinstitute mandatory stay-at-home orders. New Mexico, which implemented a stay-at-home order last Friday, did not categorize real estate as essential. But though physical brokerages in the state must close, brokers and agents can continue working remotely and fulfilling transactions as long as they have no in-person contact with clients or other professionals.

Other states, such as Illinois, Michigan, and Washington, have put less aggressive rules in place that do not affect real estate. But governors there have indicated a full lockdown is likely, which could potentially force pros to scale back their business activities dramatically. It’s up to each state to decide whether to categorize real estate as essential. Last spring, state REALTOR® associations asserted a number of important justifications for advocating “real estate brokerage” as an essential service, including:

1. It’s necessary to help consumers with immediate housing needs, such as pending transactions or housing uncertainty due to job loss, furlough, or other sudden change in consumer circumstances. Shelter-in-place is meaningless without the shelter.
2. Real estate is essential to the future stability of any city, state, or federal economy. Housing is the backbone of the economy, and letting it lapse now will make it much harder to rebound in the near future.
3. Financial services, including mortgage, title, and insurance services, have been deemed essential in most states. The driver of all these businesses is real estate, which directly supports and facilitates the essential work of the mortgage, title, and insurance sectors.
4. Current pending listings and real estate contracts in the jurisdiction at issue will be in limbo. Without designating real estate as an essential service, these citizens will have no clear path or direction on what happens with their pending legal contracts, financial commitments, and where they will be sheltering.
5. Commercial and residential construction has been included as an essential service in other jurisdictions, and real estate services are the only means by which those commercial and residential construction projects are brought to market.
6. Where legal and financial services are considered essential, closings could go forward. Not including real estate services as essential is akin to leaving out the one market participant that gets the transaction going in the first place.
7. Real estate services can be conducted safely and without large gatherings. Showings and closings usually involve fewer than three or four individuals. The real estate industry has implemented aggressive CDC and local health guidelines on social distancing. Other industry practices include adhering to safe practices when interacting with consumers; virtual showings; remote work policies, where all real estate agents are working remotely from home and minimal staff remain in the office to process transactions; policies and procedures to address instances of COVID-19; and electronic signatures for all real estate contracts.
8. The Department of Homeland Security’s Cybersecurity & Infrastructure Security Agency lists in its Essential Critical Infrastructure Workers Guidance document “residential and commercial real estate services, including settlement services” under the other community- or government-based operations and essential functions.

Foreclosure filings in October climbed 20% compared to September’s figures as the pandemic remains a threat to homeownership for some Americans and to the economy, ATTOM Data Solutions, a real estate research firm, reports. Foreclosure filings include default notices, scheduled auctions, or bank repossessions.

“It’s a little surprising to see foreclosure activity increasing in spite of the various foreclosure moratoria that are in place,” said Rick Sharga, executive vice president of RealtyTrac. “It’s likely that many of these properties were already in the early stages of default prior to the pandemic, or are vacant and abandoned, which makes them candidates for expedited foreclosure actions.”

Some surveys have also suggested that many struggling homeowners may be unaware of foreclosure moratoriums put in place by lenders during the pandemic that may be able to shield them from foreclosure for up to a year. Borrowers must contact their lender to initiate that, however. Read more: 400,000 Homeowners Are ‘Needlessly Delinquent,’ Study Says

The metros areas seeing the largest increases in foreclosure starts last month were New York, Chicago, Los Angeles, Miami, and Houston.

“It’s probably not a surprise that almost all of the metro areas where foreclosure activity increased on a month-over-month basis are also places where unemployment rates are higher than the national average, and in many cases have been hot spots of COVID-19 infections,” Sharga says. “Still, it’s important to keep the numbers in context—even with these increases, overall foreclosure actions are still below last year’s levels by about 80%.”

The states with the highest foreclosure rates nationwide are South Carolina, Nebraska, Alabama, Louisiana, and Florida. Broken out by metro area, the areas with the highest foreclosure rates in October were Peoria, Ill.; Champaign, Ill.; Birmingham, Ala.; and Houma, La.

A total of 6,042 U.S. properties entered the foreclosure process in October.

As the pandemic continues, more home buyers are looking for properties that can house their older family members. The goal for these buyers is to keep their aging family members out of senior living—particularly group setting facilities, which have been on heightened alert during the COVID-19 outbreak. This is translating to the desire for larger homes that can accommodate more family members, The Wall Street Journal reports.

The National Association of REALTORS®’ newly released 2020 Profile of Home Buyer and Sellers showed that buyers purchasing a home since the start of the pandemic have been more likely to purchase a multigenerational home—15% versus 11% who purchased prior to 2020. Home buyers cited multiple reasons, such as the health and caretaking of aging parents and relatives, cost savings, the desire to spend more time with aging parents and relatives, and the need for the delayed independence of children. They also said buying a multigenerational home allowed them to pool multiple incomes to purchase a larger home.

NAR Survey Reveals 14 Home Buying, Selling Trends Since the Pandemic

Meanwhile, occupancy at assisted-living facilities and independent living centers decreased by more than 2.5% in each of the last two quarters since the pandemic, according to the National Investment Center for Seniors Housing & Care, as reported by The Wall Street Journal.

Home builders are increasingly trying to respond to the call for homes that can accommodate multiple generations, such as with two primary owner suites, including one on the main floor. In response to the uptick in demand, Lennar Corp., a homebuilding giant, says it expects to increase its line of Next Gen homes by more than 20% compared with last year, The Wall Street Journal reports. M/I Homes says it has debuted a new floor plan that includes a separate multiroom space on the main floor of the home that can serve as a room for an aging parent or home office.

Builders of accessory dwelling units—backyard houses that can serve as separate living quarter—are reporting a rapid rise in business since the pandemic began.

“We’re hearing stories about how people went to visit their family members and couldn’t go into the facility and talked to them through the window,” Daniel Blumenkrantz, analyst at Urbaneer ADU, a Freehold, N.J.–based company, told The Wall Street Journal. “We figured there has to be a way around this.”

Urbaneer ADU will install an accessory dwelling unit on a property and charge an installation fee, often ranging from $7,500 to $10,000. The customer then pays $2,000 a month for a minimum of five years. The company removes the cottage when it’s no longer needed. On its website, the company says that the cottage plus in-home care is cheaper than assisted living, which likely would be dependent on the person’s health circumstances and location.