Seasonally adjusted homebuying demand, for the full week ending May 31, has risen 22 percent from its January and February levels, according to the latest data.
It is the seventh straight week that an increase was recorded since dropping to its lowest in mid-April, recent data revealed. Demand peaked on May 28 at 25 percent (seasonally adjusted) above its pre-pandemic levels, while the demand for last May 31 was up 17 percent, possibly due to the recent protest actions and imposed curfews in some cities. It is expected to get a clearer picture of homebuying demand soon--whether it will continue its momentum or be dampened by recent events.
Sellers are also returning to the market, albeit more cautiously. A Redfin real estate agent described the situation as a "mix" of sellers moving because of a new job, moving to suburbs for a bigger house, and landlords that want to let go of their property.
Homeowners were previously more inclined to rent out than sell their property because of rising rent and dropping interest rates. But the current health crisis is motivating sellers to list their homes as they look to simplify their lives, the report said.
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For those who chose to list their home, many would move out and head to their in-laws or rent for the first week or two, due to health concerns, and then return only when there is already a buyer.
Still, new listings declined 22 percent from the same period last year. The volume of homes for sale also fell 24 percent from the same period one year ago. The tight supply is making the market more competitive.
The low inventory of homes for sale and declining mortgage rates are giving homebuyers enough motivation to enter the market now. For the week ending June 4, the 30-year fixed-rate mortgage averaged 3.18 percent. It is up slightly from its all-time low of 3.15 percent, Freddi Mac reported.
The economy is showing signs of slow recovery, Freddie Mac chief economist, Sam Khater, said. And while homebuyer demand is increasing, supply is still low, leading to an even wider gap compared to the pre-pandemic demand-supply difference.
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Moreover, the median sale price was also up compared to the same period last year at two percent, while the median asking price for new listing went up by percent compared to the same week the previous year. Sale price growth in late June and July is likely to pick up as listed home start selling, the report added.
It also noted the shifting in homebuyer preferences; most buyers are no longer into big cities. According to pageviews data, homes in rural areas and cities with a population of less than 50,000 have seen pageviews increase five times more than homes in larger cities and suburbs with more than one million residents.
Also, full-time remote-work or part-time work-from-home options allow people to save on transportation costs, giving homebuyers incentives to look for bigger homes that also offer more outdoor space.
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