The housing market’s reaction to the pandemic was unexpected, but now that the delta variant is here, how will it impact the heated market? Realtor.com says the variant could either upend the market or act as a mere hiccup. Whether or not the variant takes a toll on the housing market, it has already impacted volatile financial markets and increased uncertainty in the economy. Realtor.com’s chief economist predicts the variant will not force buyers to retreat. But one large piece to the hot housing market today are low mortgage rates and these have been influenced by the delta variant already.
The lower rates plus the fears of renewed lockdowns and closures could spur more buyers into the market. Conversely, the renewed health crisis—or just the threat of one— could scare some sellers into holding on to their homes. This could push prices even higher and lead to another surge in bidding wars and offers over asking.
“The thought of going back into a phase where we might have increased restrictions and lockdowns can be anxiety-provoking for people,” says psychotherapist Jaime Saal. She’s the executive director of the Rochester Center for Behavioral Medicine in Michigan. “You might see another rush [into the market] if restrictions tighten back up, if people feel there’s another possibility of another lockdown.”
Or pandemic-weary Americans may no longer be fazed by the mutating virus, particularly if new stay-at-home orders aren’t issued. Vaccinated sellers and those who aren’t concerned with the virus could continue to put their properties up for sale, while buyers uncomfortable visiting homes in person may just tour them online.
Meanwhile many buyers frightened by the pandemic have already purchased homes. Others who decided to wait out the high prices may continue to do so. And the impending return to the offices may keep folks from buying homes farther out from the big cities that require long commutes.
“I don’t think delta is going to dent the housing market unless it starts to elude our vaccinations to the point where we start self-quarantining and schools start shutting down and we go backward on the reopenings,” says Mark Zandi, chief economist of Moody’s Analytics.