U.S. housing activity surpassed pre-pandemic levels in broad swaths of the country, as dirt-cheap mortgages spur home shoppers to enter the market, according to a report from realtor.com Thursday.
The average 30-year mortgage rate fell below 3% for the first time on record, mortgage giant Freddie Mac said Thursday. At the same time, early measures of housing activity, including new listings, search traffic and days on market, zoomed past pre-pandemic levels in the West and Northeast, according to listing portal and data engine realtor.com.
The biggest problem: Shoppers are running up against limited options, said Danielle Hale, the site’s chief economist.
“Home buyers, trying to take advantage of record-low mortgage rates and make up for lost time, are finding limited and more expensive options,” Ms. Hales said.
Nationally, the market activity index was only a tick below January levels, a pre-Covid-19 benchmark, in the week ending July 11. The South and Midwest have been slower to return to pre-pandemic levels, especially in metro areas such as Milwaukee, Minneapolis, Atlanta and Chicago.
By contrast, new listings, days on market and pricing has seen the greatest recovery in urban centers, including some of the earliest hotspots for Covid-19 that have since gotten the virus under control. They include Boston, Seattle, Denver, Philadelphia and the New York metropolitan area (which includes northern New Jersey), according to realtor.com.
Realtor.com's recovery index has surpassed January levels (>100) in cities such as Seattle and Boston, while many parts of the Midwest and South have yet to return to pre-pandemic strength (100).
Mansion Global / Realtor.comThe biggest roadblock to recovery in sales activity remained low housing supply in the week ending July 11, when total inventory nationwide was down 32% compared to a year ago. The listing shortage has created a clear sellers’ market, where prices have remained stable and home shoppers have to compete over limited options.
Besides low mortgage rates, the bounceback in demand has come from buyers who would have shopped during the usual spring buying season if not for lockdowns that stymied house tours and transactions.
“Today’s market remains tipped in favor of sellers as would-be spring buyers are shopping well into what would normally be summer vacation season,” Ms. Hale said.
Mansion Global is owned by Dow Jones. Both Dow Jones and realtor.com are owned by News Corp.
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Housing Activity Shows Strong Signs of Rebounding in Northeast, West - Mansion Global
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