A sale sign is seen in front of a house when the National Association of Real Estate Agents released a report showing that home sales fell in December 2017 on January 24, 2018 in Miami, Florida.
Joe Raedle | fake pictures
Home prices strengthened in April, despite a national economic shutdown and a sharp drop in home sales due to the coronavirus.
Existing home prices increased 4.7% compared to April 2019, and an increase of 4.6% in the previous month, according to the S&P CoreLogic Case-Shiller National Home Price Index. Price gains have accelerated since the fall.
The composite of 10 cities increased 3.4% annually, unchanged since March. The composite of 20 cities increased 4% year-over-year, compared to 3.9% the previous month. Detroit continues to be excluded from 20-City Composite due to price reporting issues caused by the pandemic.
The cities with the highest annual price gains were Phoenix, Seattle, and Minneapolis. They reported increases of 8.8%, 7.3% and 6.4% respectively. Twelve of the 19 cities reported higher price increases in the year ending April 2020 compared to the year ending March 2020.
“April’s house price data continues to be remarkably stable,” said Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices. “The price trend that existed before the pandemic appears not to have been disrupted, at least at the national level.”
Record low mortgage rates have been giving buyers more buying power, helping to keep prices strong. However, the average rate on the popular 30-year fixed-rate mortgage rose briefly in March, which would have taken into account sales closed in April. Rates have receded since then.
Existing home sales fell at the slowest pace in a decade in April, according to the National Association of Real Estate Agents, as open houses closed and the entire home search process went online. Not only did buyers pull out, but sellers waited to list their homes or those already on the market pulled out their listings.
But home sales have recovered quickly and dramatically, with contracts signed for existing homes in May that have taken the strongest monthly jump since Real Estate Agents began tracking the metric in 2001. The supply of homes for sale continues falling, even when new listings appear on the market now. Demand is incredibly strong, suggesting that prices will only increase in the coming months.
“As states and businesses continue to expand their activity, home buyers are showing increasing interest in buying homes, particularly those looking to take advantage of attractive low mortgage rates,” said George Ratiu, economist at realtor.com. “However, extremely low inventory, low mortgage underwriting, and high unemployment continue to be the main challenges for many buyers. The latest weekly housing data shows that national inventory is trending strongly downward.”
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