Hello. This is Lawrence Yun, chief economist with NAR, and I am happy to share with you the great news on home sales.

In December, it increased about 1%, but what is significant is that it is up better than 20% from one year ago, and this is for third straight month running: October, November, December sales solidly up from one year ago by better than 20%, so the buyers are clearly rushing into the market.

What is the constraining factor is the lack of inventory. In December, we hit all-time low in the inventory count, and for industry professionals, you look at the balance of supply and demand as reflected in months supply, and a balanced market will be about five or six months supply. Not the case this year. The months' supply falling to all-time low, under two months supply, which means extremely tight market conditions. Too many buyers chasing after too few homes listed on the market.

That is why multiple offers have become quite prevalent, with frustrating results, where you have one winner on the bid and multiple losers, but given the exceptionally low mortgage rates we expect the buyers to be in the market and throughout 2021, particularly as the economy steadily improves, the stimulus package will help in the second half of the year. We are relying on the distribution of vaccine, so let's hope for efficient distribution so we can return to the normal life of going to the restaurant, seeing a ball game, or going on a travel.

That means even faster job creation now. With job creation will be accompanied with continuing low interest rate environment. I expect only a decimal point or two increase in mortgage rate in 2021.

Home prices rising to an all-time high for the month of December. The all-time absolute high was set in October. Usually home prices do decline a bit during the winter months, but this winter the decline has been much more modest. What is important is to compare with the same time one year ago, and it is up close to 13%, so for a typical homeowner in 2020, it's been a great year. A housing equity gain of nearly $25,000, so typical homeowners would have accumulated that much in housing equity, but what is concerning is that because prices are rising and lack of inventory, that it could potentially chalk up first-time buyers in 2021.

The early signal on the inventory is that perhaps we will get more home builders are responding to the profit incentive. Housing shortage, whatever the builders build, they're able to easily sell it, so given these incentives home builders are actually boosting production, but it will take several months to bring it onto the market.

But overall, 2021, we are out of economic recession. Job creation is near certain in 2021, and with the housing demand exceptionally strong, it should be another good year for the housing sector.

Thank you.