Home Prices Rising Despite Coronavirus
Several reports this week suggest despite the crippling effect the coronavirus has had on the spring housing market, home prices continue to increase.
Below is a quick summary:
Radian: Home Prices Up 5.8% Annually in March
Radian, Philadelphia, said its Home Price Index showed home prices across the United States rose at an annualized rate of 5.8 percent in March. The Radian HPI also rose 7.7 percent year-over-year (April 2019 to March 2020), which was slightly higher than the year-over-year increase of 7.4 percent recorded last month.
Steve Gaenzler, senior vice president of Data and Analytics with Radian, said while real estate markets came under significant pressure in the second half of March, as of the end of the month the impact of the COVID-19 crisis had yet to materially translate into any impact on home prices.
“U.S. housing values remained well supported in the early days of the COVID-19 pandemic,” Gaenzler said. “While that could change going forward, data indicates that the impact may vary significantly by region and locality.”
Radian said nationally, the median estimated value for single-family and condominium homes rose to $252,597. Home values have increased consistently since the low the Radian HPI recorded in the second quarter of 2012. On an annualized basis, home prices nationally rose 6.28 percent in the first quarter, as limited supply and strong demand supported an earlier-than-normal spring pick-up. The early spring season began to take hold prior to the onset of COVID-19 related shutdowns in many cities, which helped underpin prices in March.
The report said during the first quarter, the West and South tallied the best regional performances, recording 6.91 and 6.62 percent annualized gains respectively. The Northeast, as is typical in the winter and early spring months, lagged the other regions, only recording a 1.95 percent quarterly gain. On a monthly basis, from February to March, all of the regions reported positive increases in home prices, with the exception of the Mid-Atlantic region, which declined slightly from the prior month.
RE/MAX: Strong Q1 Start Slowed by Pandemic
RE/MAX, Denver, said while March marked the fourth consecutive month with year-over-year increases in U.S. home sales, the company’s National Housing Report said the spread of COVID-19, and the initiation of governmental measures to slow it, dampened the month’s overall sales results.
RE/MAX noted sales growth from February to March averages 32% and is typically the largest month-to-month increase of the year. But this year, March sales climbed just 23.8% over February – the lowest such gain in the report’s nearly 12-year history.
“As expected, the strong market of January and February continued into March, setting up a very good first quarter. But then the coronavirus and the initial mitigation measures arrived, disrupting our industry along with everything else,” said Adam Contos, CEO of RE/MAX Holdings Inc.“Conditions and restrictions vary throughout the country, so some areas continue to see new listings, pendings and closings, while other markets have slowed dramatically – especially where real estate was not deemed an essential service. It’s a fluid situation. We believe that interest in buying or selling remains high, and pent-up demand in many places should drive sales higher over time.”
–March saw continued year-over-year increases in U.S. home sales – a streak not seen since 2016. Of 52 metro areas surveyed in March 2020, average number of home sales rose by 23.8% compared to February and by 2.7% from a year ago.
–Sales prices in March continued to climb. Seventeen metro areas increased year-over-year by double-digit percentages, with the largest sales price increases seen in Birmingham, Ala. at +19.8%, Cincinnati at +14.3%, and Salt Lake City, Utah at +14.1%.
–On average, homes sold faster. Average days on market for homes sold in March fell to 54, down five days from February and down five days from a year ago.
FHFA: February Home Prices Up 5.7% from Year Ago
The Federal Housing Finance Agency yesterday said its monthly House Price Index rose by 5.7 percent annually from a year ago. Month over month, the index reported an 0.7 percent intcrease.
“The growth in home prices coincides with other data showing robust housing market activity in early 2020 preceding the current crisis,” said FHFA Deputy Direcgtor Lynn Fisher. “Transactions still do not reflect much, if any, influence from the COVID-19 outbreak as of February.”
The report said all nine regions posted gains in February. The Mountain region led with an 8.1 percent annualized gain, followed by 6.2 in the Pacific region and a 6.2 percent increase in the South Atlantic division.