While May is typically the month for the most robust homebuying activity, the coronavirus pandemic this year has pushed that peak to August, according to a new realtor.com® report. Current growth in home sales, buyer demand, and housing prices have surpassed year-ago levels.
Realtor.com®’s Housing Market Recovery Index, which measures the progress of the real estate market’s recovery, reached a reading of 103.8 for the week ending Aug. 1—3.8 points above the pre-COVID-19 baseline. (The index compares current housing data to January 2020 as a baseline for pre-COVID-19 measurements. Any reading above 100 indicates a stronger recovery.)
“Real estate activity in the U.S. has regained its strength and continues on an upward trajectory as we enter the middle of the summer,” says Javier Vivas, director of economic research for realtor.com®. “However, a sustained seller comeback still hinges on back-to-school plans and extended lockdowns. The housing market will need to remain above pre-COVID levels for at least another 10 weeks to make up for the lost activity in the second quarter of the year.
“As we head into fall,” Vivas continues, “an anticipated resurgence in COVID-19 cases and economic aftershocks are likely to create an uphill battle for home buyers and sellers.”
Nevertheless, August is proving to be a productive month for real estate professionals who are helping their clients close deals. Homes are selling four days faster than a year ago, and median listing prices are 9.4% higher annually—which is “the most surprising aspect of how the housing market has fared” against the economic downturn, realtor.com® notes.
The biggest hurdle for home buyers: limited inventory. The number of homes for sale is dwindling, down by 35% annually. “These conditions set the stage for further price gains ahead, a trend which could eventually cause buyer demand to cool,” realtor.com® notes in its report.
The West region of the U.S. continues to lead in the national housing recovery during the pandemic. The Northeast also registers a higher recovery pace. But the South and Midwest continue to lag, realtor.com® notes.