New listings and home sales drop in what would have been peak homebuying season
At the end of February and the beginning of March, even from December last year, it was projected that the spring homebuying season would arrive early.
In fact, January 2020 was even the strongest January for purchase mortgage applications in 11 years, according to the Mortgage Bankers Association.
The beginning of March also showed that homebuyers were anxious to get moving into homebuying season, but that was before the coronavirus changed everything.
Although there were still homes being sold in early March, that means they were likely under contract in February, before COVID-19 nearly forced the U.S. economy to shut down, Redfin said.
To this effect, the median U.S. home prices kept climbing, gaining 7.1% year over year and 3.3% month over month, to $303,200.
But towards the end of March, when stay-at-home orders were put into place and people were left unemployed, there was a 148% year-over-year increase in homes being delisted during the week ending March 29, coming to a total of 28,140 homes pulled off the market, according to Redfin.
Now, there is a more than 10% decrease in new listings from a year earlier, and a 9% total drop in total number of home sales in a single month.
Home sales in March were only slightly impacted by the coronavirus shutdowns, sinking from 9.1% nationwide from February on a seasonally-adjusted basis. Redfin says this is the largest decline on its record – the fall was 1.2% year over year in March – the first decline in nine months.
By the last week of the month, they were down 11.5% from the same period a year earlier.
Nationally, active listings fell 13% year over year in March.
“The impacts of the coronavirus hit the economy hard in mid-March, as we have been reporting in our weekly data, but it’s good to step back and take an aggregated look at the market,” said Redfin Lead Economist Taylor Marr. “Real estate activities nearly ground to a halt in some parts of the country by the end of March, disrupted by shelter in place laws.”
“Right now, sellers need to decide if they’ll list their home for sale among all the economic uncertainty,” Marr continued. “On one hand, the number of homes for sale is down more than 20% in recent weeks, even more than the 13% drop we saw for the full month of March, and home prices have so far held better than anyone expected. On the other hand, jobless claims continue to pile up and it is getting increasingly difficult to get a mortgage, which could limit buyer demand. How the market shapes up through the rest of spring will depend heavily on unemployment and the availability of credit.”
The markets that saw the biggest declines from a year ago were all in New York – Rochester had a 18.5% dip, New York sank 18.3% and Nassau County fell 17.3%. Redfin noted that there were no metros that saw a year over year median price decline in March.
Seasonally-adjusted new listings in March fell the most from a year earlier in Allentown, Pennsylvania; Kansas City, Missouri; and Tulsa, Oklahoma by 46.2%; 46.1%; and 42.7%, respectively.
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