COVID-19

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

Amy Scott Jun 22, 2020
Heard on: Marketplace Morning Report
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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
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

How many people are flying? Has traveled picked up?

Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.

How are Americans feeling about their finances?

Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.

Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.

What’s going to happen to retailers, especially with the holiday shopping season approaching?

A report out recently from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.

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