And what it means for the months ahead.
We are living in an unprecedented time. The United States is facing the worst economic crisis since The Great Depression, driven by COVID-19, and an increasing unemployment rate, currently as high as 14.7%. Protests have also erupted across the world in support of George Floyd, police reform, and racial inequality.
In March and April, we waited for signs of how the housing market would react to these moments in real time. In May, as more states began to open, we began to see pieces of the puzzle come together. Here’s what we saw.
Demand is up, in some income brackets
The housing market rebounded in May — with home sales surging 16.6% over April. This rebound is largely attributed to pent up demand and low supply, which has high income buyers flocking. In fact, according to the MBA, top residential markets like New York, California, and Washington have been seeing week over week increases in home purchase applications.
However, it’s important to remember that purchasing a home right now is not an option for everyone. Widespread changes in employment have hit people already making a lower income and, statistically, people of color have seen the brunt of these changes — further increasing the wealth gap here in the U.S. While the market is beginning to rebound, it remains increasingly difficult for some to purchase a home.
Homes are selling for more money
For those still looking to buy, record low interest rates coupled with a decrease in inventory has created a competitive residential market. According to realtor.com, the median home listing price grew by 1.6% from May 2019 to May 2020 reaching a high of $330,000.
But are selling at a slower rate
With that said, homes are sitting on the market longer due to COVID-19 restrictions. On average, homes are selling 15 days slower compared to last year and in the largest metro areas, homes are selling 13 days slower. According to realtor.com, markets that saw the greatest impact are, unsurprisingly, areas that have seen COVID peaks — like Michigan, New York, and Pennsylvania.
So, what does this mean now?
This all signals that the market is hot and beginning to recover to pre-COVID levels. As more states open, we expect to see steady home prices and more listings to keep up with pent up demand.
Interested in learning more about what’s happening with the market near you? Our on the ground experts are happy to chat. firstname.lastname@example.org