The Impact of Coronavirus on the U.S Housing Market

Has the coronavirus impacted the housing market?

Yes, COVID-19 has impacted the U.S. housing market. As the pandemic began spreading in mid-March, the amount of homes for sale decreased as sellers delisted their homes to prevent the risk of contracting COVID-19. At the same time, homebuyers were reluctant to visit prospective homes due to stay-at-home orders. However, homebuying demand began increasing in mid April and surpassed pre-pandemic levels in June. For the most current information, check out our coronavirus housing market news.

Are home prices dropping?

Not enough time has passed to see the impact of COVID-19 on home prices. In April 2020, the median home sale price in the U.S. increased 4.7% compared to April 2019. In May 2020, the median home sale price increased just 0.5% compared to May 2019. For the most current information, check out our coronavirus housing market news.

What happens to the real estate market during a recession?

Typically, during a recession, household incomes fall and people are less likely to spend money on nearly everything, including buying a home. With fewer people buying, homeowners are less likely to list their home for sale. With fewer homes for sale and fewer buyers, homes sales slow and sellers may lower their price to attract homebuyers or sell faster. However, this recession will almost certainly be very different from any past recession and there is much uncertainty about how the future will play out.

Will the housing market crash?

We don’t know yet if the housing market will crash because it’s uncertain how long the coronavirus pandemic will last and its continuous effects on homeowners, buyers and sellers. Depending on how incomes are impacted, buyers may postpone their decision to buy now and come back once the pandemic is over. However, homebuyer demand has been very strong this spring amid low mortgage rates and relocation toward affordable, less dense areas. As of July 15th, home prices have exceeded pre-pandemic levels.