The spring buying season was cruising toward a robust performance due to the lowest mortgage rates on record and a strong job market, but the economic volatility and caution surrounding the coronavirus pandemic may dampen the forecasted success. The National Association of Realtors expects a 10 percent term drop, a complete turnaround from the anticipated growth before the virus started its worldwide spread. Though the housing market so far has been less affected than other industries, the anxiety surrounding the pandemic is already causing buyers to pull back: 11 percent of realtors reported lower homebuyer traffic in a NAR survey.
The lowest mortgage rates on record are colliding with the prospect of an economic downturn prompted by the coronavirus outbreak, setting the stage for an unpredictable spring selling season in the housing market.
Early indications suggest that rock-bottom borrowing costs may not be enough to lure many home buyers amid the current uncertainty. Economists are tamping down earlier expectations that cheap rates and a strong job market would boost the housing market in 2020 following years of sluggish growth.
The National Association of Realtors had anticipated about 5.5 million sales of previously owned homes in 2020, up from 5.3 million a year in 2019 and 2018, said NAR chief economist Lawrence Yun.