Financial Impact On The Housing Market Is Getting Better
The Wheels Haven't Fallen Off Just Yet
“Americans are spending money and time upgrading their homes so they can maximize their values.” — Lawrence Yun, National Association of Realtors Chief Economist.
The wheels haven’t fallen off the housing market, at least not in terms of pricing, according to the Wall Street Journal. In fact, the National Association of Realtors found the national median home price rose 8% year-over-year in March to $280,600.
The current economic climate is much different than a recession as job losses expected to rebound quickly since about 80% of job losses right now are only temporary according to Lawrence Yun. Prior to the pandemic, there was already an inventory shortage and high demand. Both are projected to still be present.
Other factors fueling housing market optimism are the historically low mortgage rates, the healthy real estate activity in states that have opened up more than Illinois, and the fact that employed Americans’ savings rate has increased 152% since the pandemic began.
Yun expects the recovery will be fueled by sales of homes priced in the low- to-midrange category, especially if mortgage rates decline even further. At the time of this article, rates are hitting 3%.
Regionally, the Midwest and South are expected to do better, while recovery will be slower in the West and worst in the Northwest.
Good News About The Housing Market
- In-person home showings are rebounding
- The decrease in confirmed COVID-19 cases and increase in range of businesses opening has buyers and sellers reentering the market since the pandemic took hold
- New listings are up 14% month-over-month according to Zillow
- Home prices are rising just as if we were in a pre-pandemic period
- Despite unemployment rates, between 60% to 70% of Americans have secure jobs right now and trying to take advantage of lower mortgage rates
- Mortgage applications were down only 10% recently which is an indicator that things are getting better according to Lawrence Yun
- Zillow is reporting a rebound, with homes on the market for 22 days — the fastest pace since June 2018