WASHINGTON – The median home price rose 8% year-over-year in March, according to the National Association of Realtors (NAR). While buyer demand has softened and sales fell 8.5% from February, recent preliminary data indicates that the supply of homes on the market is contracting even faster.
The March NAR data largely reflects purchase decisions made in February or January. Even by the end of last month, many sellers were reluctant to cut prices. Only about 4% of sellers cut their prices in the week ended April 25, down from 5.7% during the same week last year, according to Realtor.com. Some sellers believe their homes aren’t moving because buyers haven’t viewed them in person or do not want to make offers right now, not because the asking price is too high.
Redfin Corp. said its measure of home-buying demand was down 15% in the week ended April 26, while total listings of homes for sale have hit a five-year low and the median listing price was up 1% from last year at $308,000.
While many economists expect home sales to tumble this year, many forecasts call for prices to climb slightly or hold flat. A new forecast from CoreLogic predicts that nationwide home prices will rise 0.5% between March 2020 and March 2021.
CoreLogic forecast annual price declines in some cities including Houston, Miami, and Las Vegas. It is unclear if mortgage-forbearance policies will prevent a wave of distressed sales.
“In the next 12 months it’s hard to anticipate price declines because of the mortgage forbearance in place,” said NAR chief economist Lawrence Yun. “You would have to see continuing job losses for a prolonged period leading to foreclosures and even then we may not have oversupply.”
Source: Wall Street Journal (05/05/20) Friedman, Nicole
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