Homebuying Demand 25% Higher Than Pre-Coronavirus Period
There’s nothing more indicative of a recovering economy than a steady increase in homebuying demand. According to Redfin’s latest weekly report, the week starting June 1 marked the eighth consecutive week of rising demand for homes. In fact, the recorded demand was 25% higher than it had been in January and February, before coronavirus kicked in.
Following basic demand-and-supply theory, the surge in demand has also contributed to a gradual increase in supply as sellers begin to return to the market. In one of its latest predictions, Redfin expects sales to strengthen in the coming months, with mortgage purchase applications up 7% YoY in the last week of May and up 13% in the first week of June.
Coronavirus aside, agents across the nation have also been surprised that ongoing protests haven’t deterred buyers. Instead, the current market environment of low interest rates and easing credit have taken the spotlight, consequently driving the surge in demand.
A direct consequence of this is also rising prices, with data showing that for the week beginning June 1, YoY growth in asking prices were up 9.9%, compared to 3.9% back in February. Meanwhile, sales prices in the same period were up 3.1%, a fair improvement compared to the 1.3% increase recorded in May.
Redfin agents have also seen a lot of buying activity focused on the suburbs, or in smaller, more affordable cities. A clear study has yet to be conducted, but industry experts suggest this may reflect the increased flexibility in remote working arrangements, or simply the desire to live in houses with more space after months of social distancing in small metropolitan housing. To top it off, the current interest rate environment serves as the perfect catalyst to set these homebuying plans in motion.