The housing market is blaring with signs of a recovery — rising mortgage purchase applications and homebuilder sentiment.
Housing was healthy going into the coronavirus pandemic, which forced Americans to stay and work from home. With Americans stuck at home, they are expecting more out of their homes and are eager to move somewhere that suits their needs.
“What you're really seeing right now is a giant reshuffle in the housing market,” Barbara Corcoran, host of ABC’s Shark Tank and founder of the Corcoran Group, an New York City-based residential brokerage firm, told Yahoo Finance. “Everybody who's sitting at home has the time to think about, is this what I want. What would we change?”
Suddenly, features like yard size and office space have become vastly more important to homeowners — previously, homebuyers mostly considered school district and the number of beds and bathrooms, according to Corcoran.
“It’s vastly different now. Now the home is a safe haven — literally a safe haven. It's a school house. It's a remote office. And it's got to also be perfect enough to keep you as one big happy family for 24/7. That's a lot to expect out of a house,” said Corcoran.
‘An explosion in the housing market’
As soon as states reopen from the lockdowns, said Corcoran, sales will rise quickly, thanks to pent-up demand for new homes. The coronavirus lockdown began just as the busy spring home buying season would normally begin, forcing homebuyers to put off their purchases.
Existing home sales fell almost 18% in April from a month earlier, according to the National Association of Realtors Thursday. “April was really the trough for the housing market,” Mark Fleming, chief economist for First American, told Yahoo Finance On the Move. noting that monthly data looking back three to four weeks ago is old news. “We do expect the rebound to be quite strong in the May numbers that will come out at the end of June.”
“You're going to see an explosion in the housing market just by the virtue of the quantity of change… you're going to be surprised at how the numbers are going to go through the roof… My eyes are glued on what the numbers are next month. I think you're going to be in for a happy surprise.”
Still, some local markets may continue to struggle. Mortgage applications have ticked up in some states while decline in other states, said Corcoran, and in urban areas, sales are down by 40%.
“It's kind of a choppy market… But at least we average on a high note a little bit so that we can all feel optimistic… So you've got a really whacked out, kind of erratic, up down, in between market all over the states. But bottom line, it's improving,” said Corcoran.
Sarah Paynter is a reporter at Yahoo Finance. Follow her on Twitter @sarahapaynter
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