The US real estate market has so far defied expert predictions of a pandemic slowdown. Figures since May have consistently shown huge interest from buyers and house prices have continued to rise. The latest figures from realtor.com reveal the busiest June on record and point to a very active summer season.
Record month for buyer interest
After an initial slowdown at the start of the pandemic, buyer interest has maintained high levels since April. May saw a sharp increase in the number of online searches and pending sales, a tendency mirrored in June.
Realtor.com has just announced record user figures for June. The online property portal received 86 million unique users last month, the highest ever. The figure comes hot on the heels of May’s 85 million, also a record for the company.
Prices and sales up
The big buyer interest has translated to more sales and higher prices. Realtor.com recorded an increase of 44.3% on pending sales in June compared to May. At the end of June, sales times were on a par with those seen a year earlier with closures taking just 7 days more than in 2019.
Prices too are rising in the US real estate market. Median listings were 6.2% higher in June compared to 12 months earlier. The trend confirms that prices are increasing at a higher rate than pre-pandemic. In June alone, realtor.com recorded a rise of 1.9% in median listing prices.
Cheaper mortgages and more jobs
An improved job market and low mortgages are the reasons behind the increase in searches for homes and pending sales according to Danielle Hale, Chief Economist at realtor.com. She points out that unemployment dropped from 13.3% in May to 11.3% in June.
Job losses have eased in the US and buyer confidence is back to pre-pandemic levels. Record low interest rates for mortgages are another factor driving buyer demand across the country.
US real estate market back to normal
The market remains just a few points from where it was prior to April this year in most of the country. Several areas have now left the recovery zone and in five cities, real estate is back to its pre-pandemic levels. This is the case in Boston, San Francisco, Denver, Philadelphia and Los Angeles; all five currently have seller’s markets.
The latest figures led analysts to predict a very busy summer season. “The consistent, record-level home buyer interest over the last five weeks is setting up the tightest summer home buying season on record,” said Javier Vivas, Director of economic research at realtor.com.
Limited choice for buyers
However, buyers will have difficulty in finding properties as supply remains constrained across the country. Total listings on realtor.com dropped by 30% in June bringing the already low inventory levels down still further.
In many areas of the US, supply sits well below 6 months, the level that experts consider to represent a balanced market. In Florida, for example, the single-family home market in May had just 3.3 months’ supply, its lowest ever.