Will the housing market survive 2020?

By August 7, 2020No Comments

38970070 - investment risk and uncertainty in the real estate housing marketThis has been a year of financial uncertainty for many Americans in the face of a pandemic. Businesses have closed and millions have lost jobs. The housing inventory is low but mortgage rates are also historically low, which gives those who are still financially secure the upperhand in the current housing market.

The U.S. economy initially took a hit when the pandemic began but has since stabilized. While prospects look good for homebuyers who have steady employment along with job security, for those who are unemployed, the prospects are much more grim. Many of the unemployed may be forced into a home foreclosure once the moratorium for lenders with federally insured mortgages is lifted.

Jeff Tucker, economist at Zillow, believes the limited supply of homes will hinder sales for the rest of 2020 based on a reluctance of current home owners to list their homes for sale. According to Realtor.com, April is the traditional peak for home listings, but in 2020, new listings were only half of the historical average.

For those who do list, fewer will be willing to cut the price. Statistics show that only 4.1% of listings were reduced at least once in the last week of June, compared to 5.6% from the same week or the prior year. Thirty-five of the nation’s top metro areas have fewer listings available than this time last year.

Housing is more affordable now with historically low interest rates but inventory remains low. If you can afford to buy a home, now may be the time with lower monthly mortgage notes available. Home buyers may be able to upscale the home they were intending to purchase because of such low interest rates.

There are also pandemic-related restrictions that make houses more difficult to buy and sell. Many house showings are conducted virtually as are many open houses and even mortgage closings. This is not likely to change anytime soon.

What does all of this mean for the real estate industry? What can we expect to see in a post-pandemic real estate market? You can read more about it from some of the nation’s top real estate producers here.