A Pandemic, Recession and Protests Haven’t Hurt Housing
CHICAGO – According to weekly realtor.com data, median home prices rose 6.2% year-over-year for the week ending June 27, and homes are selling faster than they did in 2019. Bidding wars are also back as first-time and trade-up buyers battle for the limited inventory available.
“The housing recovery has been nothing short of remarkable,” says Ali Wolf, chief economist of Meyers Research, a national real estate consultancy. “The expectation was that housing would be crushed. It was – for about two months – and then it came roaring back.”
Nearly two-thirds of consumers (61%) said it was a good time to buy a home in June, based on a Fannie Mae housing survey of 1,000 participants – a 9 percentage point increase from May. Roughly 41% of respondents said it was a good time to sell, also an increase of 9 percentage points from the previous month.
The Mortgage Bankers Association says mortgage applications for home purchases rose 33.2% year over year the week of July 3.
And while the number of sales is way down, there are signs they could rebound to the typical level of the normally busy summer home-buying season. The number of existing-homes sales plummeted 26.6% annually in May, according the National Association of Realtors® – but pending sales surged 44.3% month-to-month and were down only 5.1% compared with 2019.
“The number of buyers in the market far outstrips the number of homes available,” says Realtor.com Senior Economist George Ratiu. That leads to higher prices – even amid a recession and the worst U.S. public health crisis in a century.
Another major reason for the housing market’s rebound is the record-low mortgage interest rates. Still, concerns about rising unemployment rates and more coronavirus cases continues to cause uncertainty.
Source: Realtor.com (07/13/20) Trapasso, Clare
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