Data released on Thursday showed existing home sales tumbled 17% in April, the worst slide in ten years. Analysts at Wells Fargo point out the coronavirus crisis is presenting a major challenge for house buyers and sellers, however, they expect to see improvements soon, now that many areas have begun to reopen.
Key Quotes:
“A precipitous drop was largely expected, as social distancing and stay-at-home orders were in effect for most of March and April. Sales fell across the board with single-family and condo sales dropping 16.9% and 26.4%, respectively.”
“Every region saw a double-digit pullback in sales.”
“Widespread restrictions to contain the spread of the pandemic have been challenging for both buyers and sellers. Virtual tours and digital signings have been useful stop-gap measures. They were clearly not enough to avoid a sharp pullback in buying activity and new listings.”
“Despite the unprecedented disruption to buying and selling activity over the past two months, the median existing home price for all housing types rose to $286,800 and is up 7.4% over the year.”
“We do not expect that these rapid price gains are sustainable, as overall lower levels of activity will likely soon translate to more moderate price inflation.”
“While most areas of the country have now reopened, it will be a slow and gradual recovery. More optimistically, there are green shoots suggesting the housing market will help lead the recovery. Purchase mortgage applications dipped in late March and early April but have since steadily risen and are now down only 1.5% from their year ago level.”
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