The housing market is expected to remain volatile for the remainder of the year and into 2021, according to a report by HouseCanary.
The report no longer sees a V-shaped recovery in the near future because due to the increase in COVID-19 cases around the country and a potential pullback of federal aid from the government.
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As the coronavirus pandemic rages on, the US housing market is becoming less and less likely to see a V-shaped recovery in the coming months.
According to a report by HouseCanary, states with rising COVID-19 cases are serving as the catalyst for seller pullback, resulting in a tightening of supply, while price growth is beginning to plateau.
Coupled with the potential pullback of federal aid from the government, the housing market is on a volatile path for the remainder of the year and into 2021.
For the week ending July 17, the report said, weekly new listings were down 21.9% year-over-year. Over a longer period, from March 13 to July 17, there were 1,055,597 net new listings hitting the market, a 20.3% decrease.
According to the report, “Using a 3-week moving average, we observed that for 31 of 41 states, median housing prices for newly listed properties fell relative to the price recorded over the prior week.”
“Given these realities, we continue to believe the chances of a V-shaped housing market recovery in 2020 are growing slimmer as the possibility of volatility lasting into 2021 could be a reality,” the report reads.
Other indicators see home prices plummeting in the next year on the late June coronavirus spike
According to CoreLogic’s Home Price Index, national home prices in May increased by 4.8% compared to May 2019 and 0.7% compared to the month before. CoreLogic attributed these increases to the strong pre-pandemic market and the pent-up buyer demand that flooded the market at the end of spring and beginning of summer.
However, CoreLogic said the reality of a long-lived recession sinking in among prospective homebuyers, along with the late June’s spike in reported coronavirus cases, will lead to a decline in prices. By next May, CoreLogic predicted, home prices will be down 6.6% year-over-year, with every US state seeing a drop.
The pent-up demand is expected to slow by the end of summer, and that’s when the markets hit hardest by the economic downturn will see declines, CoreLogic found.
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Source:: Business Insider