May is usually the busiest month of the year in terms of home buying activity, but with the coronavirus pandemic wreaking havoc with traditional timelines, it looks like August will see the peak of buying instead, according to a new study by realtor.com.
The study finds that current growth in home sales, buyer demand and home prices have surpassed year-ago levels, and will continue to grow this month.
Realtor.com’s Housing Market Recovery Index, which is a measure of the progress of the market’s recovery, has reached 103.8 for the week ending August 1, which is 3.8 points above the pre-pandemic baseline. The index compares current housing data to January 2020 as a baseline for pre-COVID-19 measurements. Any reading above 100 indicates a stronger recovery.
“Real estate activity in the U.S. has regained its strength and continues on an upward trajectory as we enter the middle of the summer,” said Javier Vivas, director of economic research at realtor.com. “However, a sustained seller comeback still hinges on back-to-school plans and extended lockdowns. The housing market will need to remain above pre-COVID levels for at least another 10 weeks to make up for the lost activity in the second quarter of the year.
“As we head into fall,” Vivas added, “an anticipated resurgence in COVID-19 cases and economic aftershocks are likely to create an uphill battle for home buyers and sellers.”
Still, August is going to be a productive month if the stats are anything to go by. Homes are currently selling four days faster than they were a year ago, and median listing prices are up 9.4%. That’s the most “surprising aspect” of the housing market during the pandemic, realtor.com said.
The biggest problem for home buyers remains the limited inventory of properties for sale. The number of listed homes for sale is down 35% from a year ago.
“These conditions set the stage for further price gains ahead, a trend which could eventually cause buyer demand to cool,” realtor.com’s report said.