Will Home Sales Keep Defying Expectations?

The housing market has been defying forecasts during the COVID-19 pandemic. Initially, home sales nose-dived for three consecutive months during state shutdowns. But by June, a “remarkable housing recovery” took hold, and real estate bounced back with a vengeance, Lawrence Yun, chief economist for the National Association of REALTORS®, said Wednesday during NAR’s virtual 2020 Leadership Summit.

One-third of REALTORS® say they’re busier this summer than they were a year ago, according to a recent NAR survey. It’s a sign that even under the weight of compounding national crises—the pandemic, skyrocketing unemployment, racial inequality, and a recession—the housing market is likely to remain strong. The market is on the upswing of a “V-shaped recovery,” Yun said, with sales about 10% higher than a year ago. Yun made other observations about how the housing market is faring.

Housing Shortages Limit Sales Recovery
Inventory is 20% lower than a year ago, but buyer interest remains high, Yun said. New-home construction could alleviate shortages, but activity has fallen under historic averages for the past decade, he added. Some areas of the country saw construction halted during the initial stages of the coronavirus pandemic.

But builders are starting to make up for that lost time. Housing starts for single-family and multifamily construction jumped nearly 23% last month, the Commerce Department reported Tuesday. With limited housing supply, “there is intense buyer competition in the market,” Yun said, noting that the Western region of the U.S. is seeing the worst inventory shortages in the nation.
House Sold Sign by American Advisors Group is licensed under CC BY-SA 2.0
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