Short answer. Despite the pandemic, U.S. housing surged in 2020. New-home sales rose to 822,000 — the highest reading since 2006 — as 30-year mortgage rates fell to 3.11%, an annual record at the time.
2020 broke the U.S. housing market in two: existing inventory froze (sellers stayed off the market during the pandemic) but demand surged.
2020 by the numbers
- Existing-home sales: 5.64M (+5.6% YoY despite the inventory freeze)
- New-home sales: 822K (+20.4% YoY)
- Median existing-home price: $295,300 (+9.4% YoY)
- 30-year fixed mortgage rate: 3.11% (record at the time)
What drove the surge
Three forces. First, the Federal Reserve cut the federal funds rate to 0–0.25% in March and announced unlimited quantitative easing including $40B/month MBS purchases. Second, fiscal stimulus (CARES Act, December 2020 stimulus) preserved household balance sheets. Third, remote work permanently shifted housing-location preferences for an estimated 30M U.S. workers — driving demand for larger suburban homes, exurban migration, and a structural step-change in markets like Boise, Austin, and the Hudson Valley.
The 2021 print would prove even more extreme: 17.5% YoY price growth, 6.12M existing-home sales, and a 2.96% record-low mortgage rate.
Sources
U.S. Census Bureau Survey of Construction; National Association of Realtors Existing Home Sales report; Freddie Mac Primary Mortgage Market Survey; National Bureau of Economic Research Business Cycle Dating Committee.