Is Home Buying Demand Stabilizing?

According to a recent MReport, home buying demand in the U.S. could be stabilizing. A new study found that there was an increase in people looking for homes. Redfin reported that home buying demand increased 7% during the first week of April. The demand was down 33% the last week of March and was only down 26% the following week. Even though the economy is struggling due to the COVID-19 outbreak, Redfin states that the housing market has maintained stability in regards to home buying demand. To determine home buying demand, Redfin studies the rate in which customers go on their first home tour with an agent. This increase in buyer interest is very encouraging for many experts in the industry.

WHY HAS THERE BEEN AN INCREASE?

Redfin attributes this positive trend to the shift from in person to virtual home tours. Redfins Lead Economist Taylor Marr stated, “The resilience in home buying demand may be driven by the recent rally in the stock market which gained 20% since it bottomed out on March 23, by low mortgage rates which are now back below 3.5%, or by the simple lure of getting a deal”. In addition, Taylor Marr said that customers should be cautious because it is too soon to say if we’ve reached the bottom for the housing market. A recent study by the National Association of Realtors found that 59% of members said customers are delaying purchases for a couple months. Similarly, 57% of sellers are delaying for a couple of months. “Home sales will decline this spring season because of unique economic and social consequences resulting from the coronavirus outbreak, but much of the activity looks to reappear later in the year,” said NAR Chief Economist Lawrence Yun. “Home prices will remain stable because of a pandemic-induced reduction in inventory coupled with less immediate concerns over foreclosures.”

Click here to read the full MReport and learn more!