Last year, home buyers spent nearly $3 trillion on real estate—the highest ever. That exceeds previous highs by more than $600 million that were set in 2020 and 2005, CoreLogic reports.
Home prices are the main culprit behind that surge. By the end of 2021, home prices were 50% above their highest peak before the market downfall in 2006, CoreLogic reports.
Home sales also contributed to the record-breaking year; 2021 marked the largest number of transactions in more than 15 years, the report notes.
Researchers also cite the difference in types of homes purchased as another factor. Sales of higher-priced and spacious homes with larger square footage have boomed since 2020. In the 2000s, however, home sales favored smaller units in lower-priced areas.
Sales aren’t likely to exceed this year. The National Association of REALTORS® has predicted a slowdown for 2022 with existing-home sales to fall about 10% this year. However, “home prices are in no danger of decline on a nationwide basis, but the price gains will steadily decelerate such that the median home price in 2022 will likely be up 8% from last year,” Lawrence Yun, NAR’s chief economist, said in a recent report on the housing market.