Redfin research shows that home buying demand has seemed to stabilize, with demand down 26% year-over-year based on numbers gathered April 1-7. These numbers represent a drop from the 33% decline from the previous week.
Despite the economy coming to a halt and more than 10 million workers have filed unemployment claims, Redfin states the housing markets have maintained stability in regards to home buying demand.
Homebuying demand is determined by Redfin by studying the annual growth rate in customers going on their first tour with a company real estate agent. As mentioned above, the slight uptick in buyer interest has created a boom in the morale and optimism of many experts in the industry.
Regarding the reasons behind this positive shift, most attribute it to Redfin’s rerouting of the lion’s share of its online customer requests to its own in-house agents, limiting—or eliminating altogether—the use of partner agents.
“The resilience in homebuying 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,” Redfin Lead Economist Taylor Marr said.
Marr then added a slight warning regarding the future of home buying, particularly for those leaning toward becoming too comfortable, too soon: “Since sellers have pulled out of the market as much as buyers, home values are holding steady. But until we see a slowdown in new COVID-19 infections, hospital admissions, and deaths, it’s too soon to say if we’ve reached the bottom for the housing market.”
However, a recent study by the National Association of Realtors (NAR) announced that nearly six of 10 members (59%) said buyers are delaying home purchases for a couple of months. Fifty-seven percent said sellers are delaying home sales 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.”
Fannie Mae’s latest Home Purchase Sentiment Index (HPSI) dropped 11.7 points in March to 80.8—the lowest reading since December 2016.