U.S. housing market continues to get closer and closer to pre-COVID levels
SANTA CLARA, Calif., July 16, 2020 /PRNewswire/ --
Summer 2020 is shaping up to be a very competitive market for buyers thanks to record-low interest rates and scarce inventory, according to realtor.com®'s Weekly Recovery Report for the week ending July 11. Moreover, the U.S. housing market continues to get closer and closer to pre-COVID levels with the realtor.com® Housing Market Recovery Index reaching 98.5 this week.
"Today's market remains tipped in favor of sellers as would-be spring buyers are shopping well into what would normally be summer vacation season," said Danielle Hale, chief economist for realtor.com®. "Home buyers, trying to take advantage of record-low mortgage rates and make up for lost time, are finding limited and more expensive options. Although sellers are slowly acclimating to this unexpected surge in buyer interest, inventory is still lagging behind demand which is driving quick time on market and listing price growth on par with this time last summer."
The realtor.com® Housing Market Recovery Index reached 98.5 nationwide for the week ending July 11. This week's 0.7 point increase over last week brings the index just 1.5 points below the pre-COVID baseline.
Local Recovery: Regionally, the West (104.6) continues to lead the recovery with the overall index now visibly above the pre-COVID benchmark. The Northeast (102.6) also surpassed the recovery baseline last week, and continues to improve. The South (96.3) and Midwest (95.3) are still lagging and seem to be losing momentum in the recovery. Locally, an additional four markets have crossed the recovery benchmark this week, taking the total number of markets above the January baseline to 18, the highest since the early pandemic period. The overall recovery index is showing greatest recovery in Seattle, Boston, Denver, Philadelphia and New York, with the components of the index in these markets surpassing or approaching pre-COVID benchmarks.
New listingswere down 19 percent. The new listings trend appeared to worsen for the week ending July 11, showing a larger decline than we saw the previous week (week ending July 4) which can be partly attributed to the timing of the 4th of July holiday this year. Looking at the last three weeks combined (holiday week plus the week before and the week after), new listings are down an average of 14 percent from a year ago. While new listings have not recovered to their pre-COVID trend, they are bumping along, generally in the right direction despite occasional setbacks.
Total inventory was down 32 percent. The improving new listings trend is still not enough to offset buyer demand as more home buyers aim to take advantage of record-low mortgage rates.
Median listing prices continue growing at7.9 percent over last year, faster than the pre-COVID pace and on par with this time last year.
Time on market is now just 1 day slower than last year as buyers out-number sellers and confidence is growing for both.
Methodology: The Weekly Housing Index leverages a weighted average of realtor.com® search traffic, median list prices, new listings, and median time on market and compares it to the January 2020 market trend, as a baseline for pre-COVID market growth. The overall index is set to 100 in this baseline period. The higher a market's index value, the higher its recovery and vice versa.