Do you expect the housing market to take a significant hit?

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Here’s how Redfin’s Lily Katz sums it up: “The impacts of the coronavirus pandemic are rippling through to nearly every segment of the economy, and the housing market is no exception. The outbreak has driven sudden changes in behavior among homebuyers and sellers in the United States, which now has more reported cases of COVID-19 than any other country in the world.”

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Home inventory

The total number of homes on the market showed further declines in March. Home inventory dropped nationally in March by 15.7% year over year, Realtor.com noted, a faster rate of decline than the 15.3% year-over-year decline in February. (Year over year refers to the comparison of data from one period of time to the same period 12 months earlier.) However, by the end of the month, the rate of the decline in home inventory appeared to slow. During the week ending March 28, housing inventory — per Realtor.com — showed a year-over-year decline of 15.2%, compared with a drop of 16.8% in the week ending Feb. 29. The trends report suggests this could indicate that homebuyers may be putting off their plans in response to the disruptions caused by COVID-19. Two surveys early in March also suggested that some buyers were beginning to rethink their plans to purchase a home in light of COVID-19.

Home prices

There are also signs that home prices could take a hit from the uncertainty surrounding the pandemic. The median listing price in the U.S. grew by 3.8% year over year in March, to $320,000. However, that was slightly down from the 3.9% year-over-year growth in the median listing price in February. In the week ending March 28, the median listing price had only grown by 2.5% year over year, the slowest pace of growth since 2013 when Realtor.com began tracking that metric. With the coronavirus pandemic having such a major impact on the economy, it may make sense for some consumers to put a pause on homebuying or selling plans simply to see how the next couple of months play out. In the interim, first-time homebuyers — in particular — may benefit from using the time to research programs when they’re ready to move forward.

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