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Despite economic downturn, home prices haven’t come down much

Amy Scott Jun 22, 2020
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The number of homes for sale is down 17% from this time last year. Frederic J. Brown/AFP via Getty Images
COVID-19

Despite economic downturn, home prices haven’t come down much

Amy Scott Jun 22, 2020
Heard on:
The number of homes for sale is down 17% from this time last year. Frederic J. Brown/AFP via Getty Images
HTML EMBED:
COPY

U.S. home sales dropped to their slowest pace in nearly 10 years in May. The National Association of Realtors reported sales of existing homes fell 9.7%, to a seasonally adjusted annualized rate of 3.91 million units.

With mortgage interest rates staggeringly low, plenty of people still want to buy homes right now. Zillow economist Skylar Olsen sees it in data on deals that are in the works.

“Pending sales hit their absolute bottom relative to last year in mid-April, and since then have now risen to become almost 14% higher than this time last year,” Olsen said.

But the number of homes for sale is down 17% from this time last year, and that’s propping up prices. The supply of new homes is also tight. The pandemic has slowed building.

Ali Wolf, chief economist with Meyers Research, said that in a survey of builders, more than half said they’d raised prices in the past week.

“Why would they slash their prices right now? They have no reason to,” Wolf said.

That could change, though, when emergency unemployment benefits and other relief programs expire.

The National Association of Realtors found that almost half of homeowners have considered selling because they can’t afford their mortgage payments.

COVID-19 Economy FAQs

What’s the outlook for vaccine supply?

Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.

How has the pandemic changed scientific research?

Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

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