Realtor.com predicted the peak of home buying season will be in August this year as opposed to the usual May.
“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,” said 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, an anticipated resurgence in COVID cases and economic aftershocks are likely to create an uphill battle for home buyers and sellers.”
This week’s data shows growth in pace of sales, demand and prices have surpassed last year levels, while inventory continues to lag seasonal normals.
The Realtor.com Housing Market Recovery Index reached 103.8 nationwide for the week ending Aug. 1, posting a 0.1 point increase over last week and bringing the index 3.8 points above the pre-COVID baseline.
Other key takeaways from the study:
Time on the market is now four days less than last year, the result of lowered inventory and record-low mortgage rates that have homes selling fast.
Median listing prices grew at 9.4% above last year. It is surprising that the housing market has fared so well though faced with a pandemic, high unemployment, and an uncertain economy. “However, looking at the sheer number of buyers, low mortgage rates, and limited sellers, the strength of home prices—which are now growing at the highest pace since January 2018—makes sense,” the report read.
New listings were down 11% for the week. After gradual improvement in the trend of new sellers listing homes, the numbers fell, despite continued price gains. Selling a home now may involve some extra precautions, but it is very possible. “Continued recovery in new listings is needed before we can see sales fully recover,” according to Realtor.com’s report.
Total inventory was down 35 percent. With buyer interest high and the number of new sellers still lagging, the total number of homes for sale continues to dwindle. These conditions set the stage for further price gains ahead, a trend which could eventually cause buyer demand to cool.