Economic Update by P. DUFFY
Condo market under-performed vs. single-family homes in 2020
What does this mean? Home buyers were looking for more privacy and space in 2020, even if that meant staying in the same geographic region.
Housing market performance in urban and suburban areas was broadly similar in 2020, but the nation’s condo market failed to keep pace with the single-family home segment across a broad range of indicators last year. Besides rising inventory and a higher share of listings with price cuts, median sales price for condos rose year-over-year, but fell behind single-family homes.
Consumer credit use up 2.8 percent in December, but revolving credit use falls 3.6 percent
What does this mean? Consumers mostly resisted the use of credit cards in 2020, but still took out loans for cars and student loans.
In December 2020, total consumer credit use rose at an annual rate of 2.8 percent, with nonrevolving credit rising 4.8 percent and revolving credit falling 3.6 percent. For all of 2020, revolving credit (such as for credit cards) decreased 11.2 percent and nonrevolving credit (such as for car loans and student loans) increased 3.9 percent, leaving total consumer credit little changed.
4Q20 NAHB/Wells Fargo Housing Opportunity Index unchanged, but pricing pressures loom
What does this mean? While low rates helped support affordability, supply-side challenges in 2021 could put more homes out of reach.
Record-low mortgage rates offset record-high home prices to keep housing affordability steady in the fourth quarter of 2020 In all, 58.3 percent of new and existing homes sold during the fourth quarter of 2020 were affordable to families earning an adjusted U.S. median income of $72,900, unchanged from the third quarter but the lowest reading since the final quarter of 2018.