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Housing Market: How Is COVID-19 Affecting It?

Throughout the Coronavirus epidemic, the economy as a whole has faced numerous ups and downs. From job losses to stock crashes, these past couple months have been a roller coaster of financial trouble. While many of these major turns have been heavily forecasted, one major market that we haven’t heard alot about is the housing market. So, whether you’re in the market to buy or you’re just simply curious about the current housing market’s financial stability, let’s dive into the ways that coronavirus has impacted the United States housing market.

Aerial view of houses, housing market

Before Coronavirus

In order to understand where our housing market is now, we need to take a trip back in time to a few months before the epidemic took effect. In January 2020, the housing market seemed to be off to a fairly decent start for the year. Homes took an average of 86 days on the market to sell, which was two days quicker than January of 2019. The U.S median listing price was around $299,995 in January 2020, which was about a 3% increase from January 2019. Overall, the market was stable and homeowners were able to buy and sell fairly easily.

The Current Housing Market

Fast forward to the latest figures as of March 2020, and only two months later the housing market has seemed to take a downward turn for the worse. March home sales have dropped a staggering 8.5% compared to February’s numbers. The supply of homes for sale in March 2020 is also 10.2% lower than that of March 2019.

At the current moment, realtors are seeing many buyers taking their houses off the market due to both financial insecurities and also the personal health threat of Coronavirus. Due to social distancing practices, many sellers are pulling away from physical showings in favor or virtual options.

Also due to social distancing, many new home buyers are electing to put off the house hunt until after the epidemic subsides. As moving into a new home during the epidemic can come with it’s own health and safety risks.

Future Predictions For The Housing Market

As with anything right now, the Coronavirus has the future looking rather uncertain, especially for the housing market. Both homebuyers and sellers alike are feeling less confident in the market and are making adjustments to provide the best chance at stability possible.

It’s safe to say that a further decrease in the amount of homes both listed and closed on would be likely if the epidemic continues. Some experts report that home sales could continue to decrease as much as 30% to 40% over the next few months.

Looking to Buy?

While all may seem lost for the current state of the housing market, that’s not necessarily the case. The Federal Reserve has cut interest rates twice since the start of the epidemic, which sent mortgage rates to record lows of 3.14% – 3.57%. This could potentially be a great opportunity for buyers willing to snatch up these insanely low rates while they last.

While Coronavirus has certainly made the sale of homes more complicated, in most areas this process has not stopped completely. Some states have even classified real estate offices as “essential services” in the hopes of helping the market stabilize and reassuring buyers.

In the end, if you’re looking to buy or sell a house during Coronavirus, don’t discount the possibility entirely. Weigh your options and pay attention to your finances. A new home may still be in your future!

Written By: Gaib Bunch

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