As buyers return to the housing market, there aren’t enough homes for sale
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After weeks mostly stuck in her 960-square-foot condo in Newark, Ohio, with her husband, two dogs and a cat, Amber Simpson is ready for an upgrade. She manages a dental office, which is gradually reopening. He’s back at work as a barista. Now the challenge is finding a place to buy for under $180,000.
“It’s so competitive right now,” Simpson, 24, said. “Houses in our price range, they’re up for 24 hours, they’re in contract, they’re gone. They disappear.”
The same scenario is playing out in much of the country. As parts of the economy reopen, buyers are coming back. Purchase applications for mortgages rose 11% last week, the Mortgage Bankers Association said Wednesday, the fourth weekly increase in a row. But sellers have been more cautious. New listings are down about 40% from this time last year, according to Realtor.com.
Some are worried about having strangers come through their homes during a pandemic, said Susan Wachter, a professor of real estate and finance at the University of Pennsylvania’s Wharton School. Others are concerned about selling in a down economy.
“Many, many properties that were planned to go on the market have been pulled and the for-sale signs taken down,” said Wachter. “So if you are in the market to buy, it’s very difficult to find a home.”
And, increasingly, a mortgage. As more homeowners struggle to pay existing mortgages, lenders have tightened their credit standards for new loans.
“I think there is concern about borrower risk and the ability of borrowers to actually make their payments in view of the sharp increase in unemployment,” said Michael Neal, a senior research associate at the Urban Institute.
That increase could turn a dip in home sales into a longer-term slide.
In a new forecast, Realtor.com predicts sales will rebound through the summer, before falling again later in the year, as the effects of high unemployment sink in and coronavirus infections potentially resurge.
“We expect the economy and the housing market to be on again, off again, throughout the remainder of 2020,” said Chief Economist Danielle Hale. “So that is going to be a challenge for people just to kind of navigate a situation that’s constantly changing.”
There is a silver lining for those hoping to get into the housing market. Hale expects home prices to grow more slowly, or even fall, by the end of the year.
COVID-19 Economy FAQs
Are states ready to roll out COVID-19 vaccines?
Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.
How is the service industry dealing with the return of coronavirus restrictions?
Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.
How are hospitals handling the nationwide surge in COVID-19 cases?
As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.
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