Just How Strong Is the Housing Recovery?

Just How Strong Is the Housing Recovery? | Simplifying The MarketThe residential real estate market has definitely been the shining light in this country’s current economic situation. All-time low mortgage rates coupled with a new appreciation of what a home truly means has caused the housing market to push forward through this major health crisis. Let’s look at two measures that explain the resilience of […]

The real estate markets in Lafayette, Walnut Creek, Concord, Pleasant Hill, are still very active. Reasonable sellers are receiving offers quickly and buyer confidence remains strong.

Purchasing a home is one of the largest financial decisions that a family can make. Because of the size of the transaction, there are many complicated decisions that surround the purchase of a home.

Today we are going to talk about: Just How Strong Is the Housing Recovery?.

Just How Strong Is the Housing Recovery? | Simplifying The Market

The residential real estate market has definitely been the shining light in this country’s current economic situation. All-time low mortgage rates coupled with a new appreciation of what a home truly means has caused the housing market to push forward through this major health crisis. Let’s look at two measures that explain the resilience of the real estate market.

Purchase Mortgages

The number of buyers getting a mortgage to purchase a home is a strong indicator of the strength of a housing market. Below is a graph of the week-over-week percent change in that number, as reported by the Mortgage Bankers’ Association:Just How Strong Is the Housing Recovery? | Simplifying The MarketThe number dropped dramatically in March and mid-April when the economy was shut down in response to COVID. It increased substantially from later in April through the middle of June. The strong increase in May and June was the result of the pent-up demand from earlier in the spring along with the normal business that would have been done during that time.

Since July, the market has remained consistent on a weekly basis, but still reflects a double-digit increase from the levels one year ago. The August 12 report shows a whopping 22% increase over last year.

Pending Contracts

Like purchase mortgages, pending contracts are also a powerful indicator of the strength of the real estate market. Zillow reports each week on the percent change in the number of homes going into contract. Here’s a graph of their data:Just How Strong Is the Housing Recovery? | Simplifying The MarketThe graph mirrors the one above, showing a drop in early spring followed by a strong recovery in late spring and early summer. Then, in July, it settles into a consistent level of deals. That level, like the one for purchase mortgages, is well ahead of the level seen last year. The last report revealed that pending deals were 16.9% greater than the same time last year.

Bottom Line

Both indicators prove the housing market recovered quickly from the early setback caused by the shelter-in-home orders. They also show that Americans have realized the importance of their homes during this time and are buying more houses than they did prior to the pandemic.

Source… KCM Peter Maclennan Blog

Having a knowledgeable and experienced real estate broker on your side helps protect your interests and ensure you make the best possible decisions. We are dedicated to keeping on top of the real estate market and keeping you informed of changes. You can rest easily knowing you made a well-informed decision based on experience and insight into the Bay Area market.

To reach Peter Maclennan please call 925.385.8798 or email at peter@maclennaninvestments.com.

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