Buyers Outnumber Homes As Housing Market Stages a Comeback
After homebuyers pulled back during the height of the pandemic, demand is slowly recovering. Though sales are still below where we expected them to be at this time of the year, they seem to be on the rise after dropping as much as 34 percent below pre-coronavirus levels. Early trends for the buyer comeback include an attraction to affordable houses and prices remain stable, but Redfin says that questions still remain about who the buyers will be and if sellers will flood the market or continue to wait for better times. But for now as buyers reinstate their searches, they’re coming back to the market to face the inventory shortage again: On Redfin, there are less than 700,000 houses.
Home-buying demand took another step towards recovery, gaining strength for the third week in a row. After plummeting as much as 34% in March, home-buying demand is now down only 15% from pre-coronavirus pandemic levels on a seasonally-adjusted basis for the seven days ended on Sunday, April 26.
While the recovery in home-buying demand is starting to look more and more v-shaped, the question buyers and sellers are asking our agents is what will happen as states begin to lift stay-at-home orders? Will a burst of new inventory from sellers who have been trying to outlast the pandemic lead to lower home prices? Or will sellers stay on the sidelines while buyers, hopped up on ultra-low interest rates, bid up the limited number of homes on the market?
So far, the reality is a modest increase in new listings and pending sales. In the seven days ended April 24, almost 53,000 new homes hit the market compared to just over 48,000 for the seven days ended April 13; the date new listings hit their lowest level over the past two months. More new listings have been accompanied by more sales, with pending sales up from fewer than 31,000 in the seven days ended April 13 to more than 32,500 for the seven days ended April 24.