In case the were any doubters, new reports from three sources agree that home sales have suffered as a result of the COVID-19 pandemic.
The New York State Association of Realtors, the National Association of Realtors and TD Bank each released research covering their own individual areas of interest and expertise, yet each presented its own version of a comparatively grim picture compared with what existed only a few months ago.
NYSAR said that the New York state housing market was “descimated” in April. New listings and pending sales both fell by about two-thirds, according to its housing report released May 21. New listings fell about 68.4% to 6,507 in April 2020 from 20,600 in April 2019. Pending sales also fell precipitously, down from 12,825 sales in April 2019 to 4,287 sales last month.
Closed sales fell as well, dropping to 6,626 sales, compared with 9,374 closings in April 2019. Under the regulations that have resulted in the state’s business closings, in-person real estate showings, long associated with open house events that could draw crowds, were banned.
NYSAR reported that the median sales price was down from $269,000 to $262,000. This was the first drop in the median sales price in year-over-year comparisons since January 2016, ending a streak of 50 consecutive months of escalating median sales prices.
NYSAR found a bright spot in interest rates reported by Freddie Mac. The rate on a 30-year fixed rate mortgage in April fell to 3.31%. This was the lowest monthly average commitment rate on a 30-year fixed-rate mortgage since Freddie Mac began reporting the rates in 1971.
NYSAR found that there was 5.2 months supply of properties on the market in April, down from the 5.8 months worth of inventory before April.
The National Association of Realtors found that the situation throughout the U.S. was not as bad as what the NYSAR found in New York. Total sales of existing homes that include single-family homes, townhomes, condominiums and co-ops, dropped 17.8% from the level in March. NAR said the seasonally adjusted annual rate of was 4.33 million units, a year-over-year decrease when the annual rate had been 5.23 million units in April 2019.
NAR said each of the country’s four major regions experienced a decline in month-over-month and year-over-year sales, with the West seeing the greatest dip in both categories.
In what some people might view as a contradiction, NAR said the median existing-home price for all housing types in April was $286,800, up from April 2019 when it was $267,000. NAR said prices increased in every region. April’s national price increase marks 98 straight months of year-over-year gains.
“The economic lockdowns, occurring from mid-March through April in most states, have temporarily disrupted home sales,” said Lawrence Yun, NAR’s chief economist. “But the listings that are on the market are still attracting buyers and boosting home prices.”
“Record low mortgage rates are likely to remain in place for the rest of the year, and will be the key factor driving housing demand as state economies steadily reopen,” Yun said. “Still, more listings and increased home construction will be needed to tame price growth.”
NAR said that first-time buyers were responsible for 36% of sales in April 2020, up from 34% in March 2020 and 32% in April 2019.
TD Bank, in its economics report, said that a major pull-back in real estate activity was expected in April as markets paused amid lockdowns mandated across most of the country to limit the spread of the virus. It said the events of April represented the largest single-month contraction in home resales since July 2010, when monthly sales fell 22.5%.
“With the U.S. economy shedding more than 20 million jobs in April, the devastating impact of the pandemic on the job market will likely weigh on real estate activity for quite some time,” TD Bank reported.
“Nonetheless, as the economy slowly reopens and people gradually go back to work, we should start seeing some improvements in job market conditions over the next few months.”
TD Bank said it has noted some “early signs of a pick-up in real estate activity, boding well for a gradual recovery over the coming months. These include showings and weekly mortgage applications which, supported by a favorable mortgage rate environment, appear to have bottomed out in April and have made a significant comeback in recent weeks.”