How Is COVID-19 Affecting the Housing Market Weeks Into Social Distancing?

Two extremes are coming into play during the COVID-19 pandemic: Pending sales are down 42 percent compared to last year over the last seven days, but some committed homebuyers are buying houses without even stepping foot in the home, according to Redfin. It is unclear how long the effects of coronavirus on the housing market will last, but with the push for virtual tours, falling prices, and the success of only the extremely competitive-priced homes, some of the immediate impacts are clear.

Uncertainty reigns in the real estate market right now, just like it does in the rest of American life. It’s clear that the number of home sales is going to decline over the short term, with pending sales down 42% between March 23 and March 29 compared to the prior year. What’s still unclear is what impact the COVID-19 pandemic will have on sale prices, and just how long the slowdown will last.

The first step in getting a perspective on where prices are heading is gauging how home-buying demand is changing. We measure home-buying demand by the annual growth rate in customers going on their first tour with a Redfin agent. On March 31, home-buying demand was down 33% over the previous seven days compared to the prior year. Last week when we reported on this number, it was down 27% compared to the prior year.

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