As the nation discusses opening up businesses and easing shelter-in-place guidelines in the next few weeks, there is a bit of good news coming from the housing market. Although would-be sellers are currently keeping their homes off the market, (National Association of Realtors (NAR) states that existing-home sales fell 8.5% in March nationwide and Realtor.com data shows that “between the first and last weeks of March, the number of new listings was down 30%”), would-be buyers are still taking advantage of the historically low interest rates and loan applications have increased.
Per the RealDeal: “The Mortgage Bankers Association’s index measuring home loan application volume slid 3.3 percent, seasonally adjusted, for the period ending April 24 from the week before. But one element of that index — a metric tracking mortgage applications to buy single-family homes — jumped by 12 percent, nearly four times the previous week’s rise… In California, activity increased by 17.2 percent.”
This disconnect between sellers and buyers seems to be a result of a “wait and see” mentality, with buyers taking advantage of the low interest rates so they are ready to go when more homes are expected to come on the market in late spring and summer.
Realtor.com chief economist Danielle Haler recently commented, “New listings continued to fall in April, as COVID-19 concerns prompted sellers to wait, which means additional declines in pending and closed home sales are likely ahead… Although fewer buyers signed contracts to buy as they stayed home to prevent the spread of COVID-19, surveys suggest that most home buyers expect just a few months delay in their journey.”