A report from Redfin
reveals that in April, a month which felt the full force of the coronavirus, home supply declined, while homebuyer demand increased. The number of homes newly listed for sale decreased by 42.4% and the number of homes available for sale dipped 24.5%.
"The supply of homes for sale declined even more dramatically than homebuyer demand in April," said Redfin lead economist Taylor Marr. "While home sales fell the most in more expensive markets, in more affordable areas, prices continued to increase. Even during the depths of the slowdown last month, the market was still faster and more competitive than it was a year earlier."
Some of the most affordable housing markets are seeing sizable gains in price, according to the report
. Nine out of 10 metro areas where home prices increased the most on a year-over-year basis, still featured median home prices that were below the national level. One possible explanation for the increase in home prices could be low mortgage rates
. The report stated that interest rates were as low as 3.29% in the first week of March, which is likely the period where offers were made on homes that eventually sold in April.
"The typical time between when a home went under contract and when the sale closes is still about four weeks nationally," explained Marr. "This means that many of the homes sold in April went under contract after the WHO declared that COVID-19 was a global pandemic, after initial claims for unemployment set new records, and after case numbers were already growing rapidly in the U.S. So, although some might have expected this dramatic disruption in the market to impact home prices, we haven't yet seen evidence that it has had much of an effect."