Homebuyer demand is now higher than before the crisis: Redfin
Home purchase demand is now higher than it was before the nation shut down for the coronavirus, in spite of the unstable job market, according to Redfin.
Pre-pandemic demand peaked on February 23 at 106.7. But two weeks later, when much of the shutdown started, it fell to 97.6. For the week ended May 17, Redfin's seasonally adjusted home buying demand index was at 116.5, marking a 16.5% increase since that time.
Low mortgage rates have spurred a rebound in home purchase loan applications in recent weeks, while social distancing and increased remote work have caused potential buyers to search for homes in the areas outside of the nation's major cities.
That migration to less-costly areas has been going on for some time now, but seems to have accelerated in recent weeks, Redfin said.
"The pandemic has people re-evaluating their lifestyle and their goals," Tiffany Aquino, a Virginia-based Redfin agent said in a press release. "People who were considering a move two or three years down the line are pulling the trigger now. I have one client who's planning to retire early, cash in on high home prices in Virginia and move to South Carolina. Another client is selling her home here to move to Florida full-time to take care of her elderly father. People are putting family priorities first."
On the supply side of the equation, the inventory of homes for sale, while down 23% on a year-over-year basis for the week of May 23, saw rising unit counts each day during that period, Redfin noted.
Sellers had been pulling their homes off the market because of the coronavirus, which exacerbated the inventory shortage. While some people are more comfortable listing their properties now, others are worrying that a second wave of the virus may shut down the economy again later this year and have moved up their timeline to take advantage of the strong demand right now, Redfin said.
Concerns that the pandemic would drive home prices down remain unfounded. The median listing price was up 6% for the week of May 15, compared to the same period last year.
Anecdotal evidence from Redfin's agents indicated that sellers would rather take their home off the market than accept a lower price. That is thwarting the desires of those buyers looking for a bargain.