The U.S. housing market might be leveling off, following a steep decline in pending home sales brought about by the coronavirus pandemic, according to a Zillow report.
Pending home sales nationwide peaked in 2020 during the week ending March 12, and a precipitous drop followed, as cities and states across the country issued stay-at-home orders.
Nationally, sales remain 32.3% below where they were at the same time last year for the week ending April 15. The week-over-week numbers improved, however, up 6.2% for the seven days ending April 19.
New listings dropped across the U.S., down as much as 43.8% year over year for the week ending April 17. They improved marginally over the next couple of days but were still down 37.7% year over year for the week ending April 19. Listings fell by 17.2% in March, while inventory increased 3.3% — possibly a result of the safety precautions imposed to help curb the spread of the virus.
The Chicagoland market was hit with a 45.5% year-over-year decrease in pending sales but saw the week-over-week figures rise 9.1%. Total listings are down 16.8% and new listings are down by 39.8%.
Prices and home values remained strong nationally. The Zillow Home Value Index indicates typical home values increased by 4.1% year-over-year in March. The median list price rose slightly, up 0.4% from 2019. Home values for Chicagoland increased by 1.1% to $242,168.
“Real estate transactions and new listings have declined abruptly amidst the coronavirus pandemic, but we haven’t yet seen prices significantly affected,” said Jeff Tucker, economist at Zillow. “Buyers have pulled back in the face of new economic uncertainty but sellers are also shying away from listing their homes in a market that was already starved for inventory, so it is possible that home prices remain insulated, at least in the short-term. Like a canoe being carried by two people who drop both ends simultaneously, the market slowdown may not tip clearly in favor of buyers or sellers.”
There is good news for prospective buyers who are looking to borrow. Mortgage rates fluctuated from the beginning of March onward, starting the month at 3.84%, peaking at 4.58% on March 13 and finishing the month at 3.44%, according to figures listed on Zillow by third-party lenders.