On Friday, the National Association of Realtors (NAR) will release its Home Affordability Index.
A recent report by Redfin revealed that prices of affordable homes in America have risen 5% during the pandemic.
It appears that low mortgage rates have attracted more buyers to jump into the market, throwing their hats—and home bids—into the ring recently. This increased in buyer interest and activity is especially seen in the niche of first-time buyers.
This increase in demand, coupled with the still-present supply shortage of homes for sale—has driven prices of the most affordable homes in the nation up 5% (year over year) just within the short time window from May 31 until now. In contrast, the home prices for the most expensive homes in the U.S. merely saw an increase of 2%.
This uptick in housing prices—even amid the economic crunch that is currently being felt by the COVID-19 pandemic—makes perfect sense, as demand is only growing with so many Americans struggling to procure affordable housing for their families. The decrease in those seeking more expensive homes likewise comes as no surprise, as the current state of instability and so many unknowns on the horizon is leading Americans to tighten their purse strings and play it much safer when it comes to their budgets.
The decrease in personal incomes of Americans due to the recent rise in unemployment also plays a factor in the quest and increased demand for affordable housing.
Pam Henderson, a Redfin agent in Dallas, commented on the increased interest in affordable housing amid this pandemic era: “Spending so much time at home during quarantine has made a lot of people realize that it might be time to stop renting a cramped apartment in the city and time to start owning their first single-family home.”
Also coming this week is an exclusive interview with Rob Dietz, Chief Economist, National Association of Homebuilders (NAHB) on DS5: Inside the Industry. Dietz will discuss how COVID-19 has impacted the residential construction industry.
Here's what else is happening in The Week Ahead:
DS5: Inside the Industry—Rob Dietz, Chief Economist, NAHB (Monday)
Initial Jobless Claims (Thursday)