The COVID-19 pandemic has impacted every person and every industry throughout the country. We’ve all seen how this outbreak has affected our personal lives, our jobs, and even our shopping habits. But how has it impacted the housing market? While the majority of people haven’t had to think about this aspect of the pandemic, for those who are currently trying to buy or sell their home, it’s something you need to be aware of. Keep reading to learn how COVID-19 has impacted the housing market. And if you’re looking for home building contractors in Fort Wayne, IN, give us a call.
The Timing of the Pandemic
First, it’s important to note that the COVID-19 pandemic struck right at the beginning of the most prolific part of the year for home sales. The real estate market begins getting busier in March and April as buyer demand begins to climb, and it peaks around June. This is the most common time to buy and sell a home, and it’s precisely when states around the nation began to issue stay-at-home orders. This only increases the pandemic’s impact on the real estate market.
The General Trend
Giving exact numbers for the pandemic’s impact on home sales is a bit tough, since buying a home is a process that can take weeks or even months. This means that homes that were closed on well after a state of emergency was declared could have been under contract before COVID-19 was ever a concern.
However, we have seen a pretty significant downwards trend in the number of homes being listed and sold since the pandemic struck. Initial projections showed a decline of roughly 30% based on previous years’ listings and closures in the market. Pending home sales fell 21% in March, and mortgage applications plunged by 31% when compared to the same time period last year.
The Long-Term Impact
But perhaps more important than the trend of declining listings is the potential long-term impact the pandemic may have on the housing market. While new listing volume is down, mortgage credit standards have also tightened, making it more difficult for homebuyers to get a loan. Additionally, the astonishing number of unemployed and furloughed employees in the country as a result of business closures may also significantly decrease market demand.
With these considerations in mind, it’s very possible that we’ll continue to see a decline in the housing market for some time. While experts don’t expect it to come anywhere close to the market decline we saw in 2007, the decreased demand will likely cause a decrease in home values as well, even as new buyers struggle to get approved for a mortgage.
The bottom line is that the real estate market is currently in flux, and it’s difficult to predict exactly what the rest of 2020 will have in store for the United States housing market. However, before the pandemic, the market had reached a 13-year high and was going strong. With any luck, we’ll be able to return to a similar place by this time next year.
If you’re considering building a custom home instead of purchasing an existing one, be sure to work with the best homebuilders in Fort Wayne, IN, Lancia Homes. Give us a call today to get started!