Single-Family Real Estate Market Measurement Source Shows Plunge
In 2019, economists predicted a strong 2020 housing market. Shortly after the start of the new year the coronavirus outbreak quickly spread across the globe.
The current statistics show America has been hit the hardest with the highest case rate and highest death rate. 90% of our nation is required to “stay-at-home” or “shelter-in-place”, which has left 22 million Americans out of work and filing for unemployment. Where has this left our housing market, and what are the numbers saying?
The NAHB/Wells Fargo Housing Market Index, a monthly survey where respondents “rate market conditions for the sale of new homes at the present time and in the next six months as well as the traffic of prospective buyers of new homes”, (NABH.org) saw a decline in the single-family real estate market health.
To date, this is the largest monthly percentage drop in the history of the index, which began in 1985, according to Barrons.
The decline started towards the end of March and have continued as we see home loan applications significantly decrease. These markers indicate builder confidence and are impacted exclusively by the uncertainty surrounding the COVID-19 outbreak.
A new Fannie Mae report claims home purchases are expect to fall 15%
However, it is important to note that Fannie Mae also predicts the median home price to actually slightly raise (instead of drop) this year from $272,000 in 2019 to $275,000 in 2020.
The outcome of the pandemic is still uncertain, but experts at both Fannie Mae and JP Morgan have been predicting a short recession following by a strong economy however it is still too early to give a true economic forecast.