According to a new report from Redfin, the effects of the coronavirus pandemic and subsequent shutdowns hit the housing market in full force in April, with sales and listings both turning in historic declines from year-ago levels.
In the past two months, the housing market has seen the fastest slowdown on record, as it flipped from one of the strongest markets ever at the end of February to a near standstill in April. However, while the April housing market felt the full force of coronavirus, Redfin’s latest data shows that buy-side demand has exceeded pre-pandemic levels.
Home sales in April plunged 22.5% from a year ago, as did both the number of homes newly listed for sale (-42.4%) and the number of homes available for sale (-24.5%). Home prices were still up from a year ago, but the rate of growth in the U.S. median home sale price stumbled slightly to 4.9% year over year, down from 6.9% in March. The national median sale price in April was $303,895.
April home sales fell 23% nationwide from March on a seasonally-adjusted basis – by far, the largest decline on record. (Redfin data for this statistic goes back to January 2012.) In general, markets with the biggest declines in home sales from a year ago were the most expensive, although due to especially tight restrictions on real estate during the shutdown, Detroit was also one of the three markets where sales slowed the most: San Francisco (-53.9%), Detroit (-46.8%) and New York (-45.8%).
“The supply of homes for sale declined even more dramatically than homebuyer demand in April,” says Redfin lead economist Taylor Marr. “While home sales fell the most in more expensive markets, in more affordable areas prices continued to increase. Even during the depths of the slowdown last month the market was still faster and more competitive than it was a year earlier.”
Many of the nation’s most affordable housing markets are continuing to see sizable price gains. Nine of the top 10 metro areas where home prices rose the most year over year still had median prices below the national level, led in April by Detroit, (median price $159,900, +27.9%), Memphis ($217,000 +22.0%) and Philadelphia ($250,000, +19.0%).
The national count of active listings of homes for sale fell 24.5% year over year during April, the biggest drop on record and the eighth straight month of declines. There were fewer homes for sale last month than any time since at least January 2012, which is as far back as Redfin has recorded this measure. None of the 85 largest metros tracked by Redfin posted a year-over-year increase in the count of seasonally-adjusted active listings of homes for sale.
So far, the pandemic has only slightly slowed the rapid gains Redfin had been seeing earlier in the year in the sales prices of homes.
“The typical time between when a home went under contract and when the sale closes is still about four weeks nationally,” explains Marr. “This means that many of the homes sold in April went under contract after the WHO declared that COVID-19 was a global pandemic, after initial claims for unemployment set new records, and after case numbers were already growing rapidly in the U.S. So, although some might have expected this dramatic disruption in the market to impact home prices, we haven’t yet seen evidence that it has had much of an effect.”
One thing that may be helping to prop up prices is low mortgage rates, which were as low as 3.29% during the first week of March when many offers were made on homes that sold in April. This was 1.12 percentage points lower than the same week of 2019, a monthly savings of $156 on the mortgage payment of the median-priced home.
Other measures of the market showed how competitive it was in April, despite lockdowns across the nation. Homes sold faster and a greater share sold for over list price than a year ago, clearly indicating that it is still a seller’s market.
Homes that sold in April spent six fewer days on market compared to the prior year. In April, the typical home went under contract in 35 days, compared to 41 days in April 2019.
To view the full report, click here.