Real Estate News And Analytics Existing Home Sales Up 21% in June Amid COVID-19 by Sylvia Shalhout July 23, 2020July 23, 2020 Sylvia Shalhout July 23, 2020July 23, 2020 Although the coronavirus managed to slow down the US housing market earlier this year, it seems that was somewhat short-lived. Existing home sales data from the National Association of Realtors for June 2020 shows a sharp increase from the month prior. Existing Home Sales Jump 21% – a Record High From May to June, existing home sales surged by 21%. The National Association of Realtors (NAR), which has been tracking sales since 1968, reports that this is the highest monthly gain on record. June data represents real estate contracts that were signed in late April and May. This means that buyers were back in the US real estate market closing deals even before much of the country began to open up and ease COVID-19 restrictions. Lawrence Yun, Chief Economist at NAR, commented on this rise in sales: The housing market is hot, red hot, based on the data and the anecdotal prevalence of multiple offers. The urban area is less hot. We are clearly seeing trends for smaller towns or suburbs. Related: Suburban Real Estate Market Boom Due to COVID-19 Historically low mortgage rates are no doubt a major driver for the surge in existing home sales. Low rates are giving first-time buyers the confidence to enter the real estate market, even amid COVID-19. In June, first-time buyers made up 35% of purchases. Based on data from previous months, first-time buyers made up around only 30% of purchases in the past. Additionally, some of the data likely represents the pent-up demand for homes for sale from the early spring when much of the US was under lockdown, and fear of the coronavirus was much higher. Although existing home sales are booming, they are still 11.3% lower than the same time in 2019. A major reason for this is the inventory shortage in existing homes for sale. Compared to June 2019, the supply of existing homes for sale was down 18.2% with only 1.57 million homes on the market at the end of the month. This represents 4 months of supply – a seller’s market. Yun commented on the low housing supply: We are facing an acute inventory shortage, especially at the lower price points. The inventory levels are shrinking and shrinking, which could create a bottleneck for further home sales later. Existing Home Sales in Major Regions in the US NAR’s data shows how each of the major regions in the US fared in terms of existing home sales in June 2020: Northeast: +4.3% Midwest: +11.1% South: +26% West: +31.9% 2020 Housing Market Predictions – A Second Lockdown? While things are vastly improving in the US housing market in terms of sales and prices are generally stable, experts are worried about what will happen if a second lockdown occurs before the end of 2020. COVID-19 cases are already on the rise in much of the US as economies began to open and fear of the coronavirus somewhat subsided. Many major cities have already put a pause on reopening their economies so a second lockdown may not be too far off if cases continue to rise at this pace. And although real estate activity was deemed essential and transactions were allowed to continue in many cities across the country, Yun reports that not many buyers are taking advantage of virtual transactions: Prices may not be damaged at all but the sales could. Virtual tours are only making up 7% of buyers. Related: How the Coronavirus Will Affect US Home Prices in 2020 and Beyond? That could mean that a second lockdown would cause another major slowdown if buyers are still not adjusting to virtual transactions which may eventually become necessary. Sign up now to Mashvisor to stay updated on real estate news around the US. Start Your Investment Property Search! START FREE TRIAL 0 FacebookTwitterGoogle +PinterestLinkedin Sylvia Shalhout Sylvia was the Content Marketing Manager at Mashvisor. As a real estate writer, she has been covering topics for the beginner and advanced real estate investor, helping them make smarter decisions as well as real estate agents looking to take their business to the next level. Related Posts Second Home Demand Rises 77% Above Pre-pandemic Levels The Impact of the Government Shutdown on the US Housing Market Mortgage Applications Rise Thanks to Low Rates Single Family Rent Prices Up by Record High 12.6% in January 2022 Prepare for Climate Change or Your Real Estate Values Will Suffer US Foreclosure Rates Fell to 15-Year Low in 2019 Los Angeles Housing Market Named the Least Affordable in the US Investments Reach All-Time High in US Housing Market No US Housing Bubble Crash in Sight, Expert Says Las Vegas Real Estate Market Returns to Normal Pending Home Sales Reach Lowest Level Since 2011 Experts: The New York City Real Estate Market is Set for a Strong Comeback Leave a Comment Cancel Reply Save my name, email, and website in this browser for the next time I comment.