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Demand for homes is down just 15 percent from pre-outbreak levels on a seasonally adjusted basis for the seven days ended April 26, according to a new report from real estate firm Redfin. That’s compared to a drop of as much as 34 percent in March.
For the seven days ending April 24, the report noted, the median listing price for a home was $308,000. And while that’s up 1 percent versus a year ago, affordable, single-family homes are selling like “hotcakes,” with agents seeing bidding wars across the country.
Overall mortgage rates have dropped to the tune of 3.25 percent, nearly 0.5 percent lower than they were at the beginning of April and approaching the record lows of March.
Additionally, the Mortgage Bankers Association reported recently that mortgage purchase applications rose to their strongest level in a month for the week ending April 24.
“The ten largest states had increases in purchase activity, which is potentially a sign of the start of an upturn in the pandemic-delayed spring home-buying season, as coronavirus lockdown restrictions slowly ease in various markets," Joel Kan, MBA's associate vice president of economic and industry forecasting, said in a statement. "California and Washington continued to show increases in purchase activity, with New York seeing a significant gain after declines in five of the last six weeks."
Fannie Mae predicts rates will keep falling and could dip below 3 percent in 2021.
Even with the increase in new listings, Redfin U.S. markets had fewer than 700,000 homes for sale, the lowest level in the past 5 years. And despite lower mortgage rates, home closings are taking almost 10 days longer than they have since the last week of February.
Moving ahead, there does seem to be pent-up demand in the housing market.
“As consumer confidence rises and employment opportunities follow, we should see a normalization of the residential market,” Garrett Derderian, founder of real estate data analysis and reporting firm GS Data Services, told FOX Business. “While housing led the recession in 2008-2009, it may be poised to bring us out of it now.”