A full year into the pandemic, and the housing market, while flourishing in some areas, has found its inventory having dropped 32.5% from March 2020 year-over-year. These findings come courtesy of HouseCanary’s “One Year Later: Understanding COVID-19’s Impact on the U.S. Housing Market” report, detailing a full-year impact of the pandemic on the nation’s housing market.
The drop in housing supply from March 2020 to March 2021 was partially the result of the rising costs of supplies, such as lumber, which have been hard to come by during the pandemic due to global supply chain issues. The National Association of Home Builders (NAHB) recently reported that the price of lumber has tripled over the past year, forcing the price of a new single-family home to rise $35,872 on average.
And with the dip in inventory, the number of listings under contract rose 4.6% during the first year of the pandemic, outpacing 2019’s figures. This spike in demand occurred as mortgage rates sat near historic lows, government relief arrived and millions of Americans yearned for more space in the new work-from-home environment.
“Although most crises tend to trigger a surge in listings for sale and downward pressure on prices, the past year saw many homeowners sit on their equity, while eager homebuyers bid up the market,” said Chris Stroud, Co-Founder and Chief of Research for HouseCanary.
Brittany Murphy, Principal Data Scientist for HouseCanary added, “Our analysis suggests that increased household formation in suburban areas and more work-from-home opportunities may perpetuate this supply-demand discrepancy for the foreseeable future.”
The study also found that homes spent a median of 12 fewer days on the market, compared to the same period the year prior, due to an increasing number of buyers chasing an ever-shrinking set of available inventory throughout 2020. The median listing price increased by 15.0%, while the median closing price jumped 18.7% from March 2020 to March 2021. During the same period, the median listing price per square foot increased by 19.0%, with the median closing price per square foot rising 17.5%.
Click here to view HouseCanary’s “One Year Later: Understanding COVID-19’s Impact on the U.S. Housing Market” report.