Realtor.com’s latest analysis “How the U.S. Housing Market Was Rocked by COVID-19—and Where We Go From Here,” takes a closer look at exactly how the pandemic rocked America’s real estate market over the past year.
A nation kept virtually isolated and “locked-in” has created a housing market where home seekers are looking for larger suburban homes and even remote locales with the ability to work remotely.
"The very nature of the pandemic, through the health implications, social distancing, and need to isolate, has really brought a central focus on the importance of home for most Americans," said George Ratiu, Senior Economist at realtor.com. "In a sense, it has elevated real estate markets as a centerpiece of our lives."
Financial factors, combined with restricted inventory, will also come into play as the spring season begins and buyers “warm up” to again as more people are vaccinated and can socialize again, more sellers will feel comfortable listing their homes.
As said recently by Redfin Chief Economist Daryl Fairweather, “This is the strongest seller’s market since at least 2006. Buyers outnumber sellers by such a huge margin that many homeowners are staying put because they know how hard it would be to find a place to move to. It seems like the only move-up buyers who are confident enough to list their homes are those who are relocating to a more affordable area where they’ll have an edge on the local competition.”
And as the rollout of vaccinations continues, many are not primed to dip their toe into the housing market. Despite record-low rates, all-time-high prices are shutting out many as first-time buyers are still not on stable enough financial footing to make a home purchase.
“This could all lead to an increase in home sales. Sales dipped in the early months of the crisis as stay-at-home orders were issued across the nation, but began picking up again in May,” said Elena Cox, Data Journalist for realtor.com. “From May to July, the number of completed home sales jumped from a little more than 307,000 to nearly 500,000. They dipped in the fall heading into the holidays as buyers paused their searches and whatever inventory was left on the market seemed to shrivel up. As more homes come onto the market, sales will likely rise. But buyers shouldn't get their hopes up too high.”
Key findings of the report include:
- Mortgage are rates expected to remain low in 2021
- Homebuilders will struggle to keep up with demand
- Home prices will continue to rise, but just not too fast
Click here for more information on realtor.com’s latest analysis.