The housing market has been defying forecasts during the COVID-19 pandemic. Initially, home sales nose-dived for three consecutive months during state shutdowns. But by June, a “remarkable housing recovery” took hold, and real estate bounced back with a vengeance, Lawrence Yun, chief economist for the National Association of Realtors, said during NAR’s virtual 2020 Leadership Summit. One-third of Realtors say they’re busier this summer than they were a year ago, according to a recent NAR survey. It’s a sign that even under the weight of compounding national crises—the pandemic, skyrocketing unemployment, racial inequality, and a recession—the housing market is likely to remain strong.
The market is on the upswing of a “V-shaped recovery,” Yun said, with sales about 10% higher than a year ago. Yun made other observations about how the housing market is faring. Inventory is 20% lower than a year ago, but buyer interest remains high, Yun said. New-home construction could alleviate shortages, but activity has fallen under historic averages for the past decade, he added. Yun predicted the housing market will remain robust in the months ahead, saying home prices will grow 3% to 5% by the end of 2020. Next year, he predicted, home prices may increase 2% to 3%. Due to the spring dip, home sales likely will end the year down 2% to 4% compared to the previous year. But that’s “remarkable,” Yun said, considering the toll of the pandemic. Home sales will ramp up again next year, Yun said, increasing between 8% to 12%.