Home shopping activity fell sharply during election week as Americans focused their attention on the heated presidential race and a sharp uptick in coronavirus cases across the U.S., according to realtor.com’s latest Weekly Housing Report.
The report cites data from the Mortgage Bankers Association that shows mortgage applications from home buyers fell to their lowest level in six months. The MBA’s weekly mortgage index showed a 3% drop in home loan applications, though these were still up 16% compared to one year ago The dip is the sixth time in seven weeks that the index has fallen though, with last week’s fall seeing it hit its lowest level since May 2020.
“Between the presidential election and a new wave of coronavirus cases, buyers and sellers had a lot of reasons to pause last week,” said Danielle Hale, realtor.com’s chief economist. “The big question is whether both buyers and sellers will jump back into the market after last week’s break. With mortgage rates expected to rise on news of a likely vaccine, buyers may have reason to jump back in and find a home sooner rather than later, but sellers may be more inclined to stay on hold. Thus, even as overall activity slows, we may very well see continued price growth and quick sales.”
Those buyers who do jump back into the market won’t exactly be spoiled for choice, though. Realtor.com reports buyers are still constrained by a limited number of homes for sale on the market, with newly listed properties down by double digits from a year ago.
“New listings are a crucial ingredient for home sales, and they will need to make a strong comeback for housing activity to continue,” realtor.com noted in its report.
The lack of inventory continues to fuel price growth, with listing prices up 12.9% from one year ago, the report showed. Moreover, the few homes that are on the market are selling fast, with most spending two weeks fewer on the market today than they were a year ago.
If homes continue to sell so fast, realtor.com said this is a good indicator that buyers have no intention of taking time off this year. However, if we see “continued steadiness in the year-over-year difference” that would indicate a seasonal pause in home buying, as usually happens during the holiday season, the report said.