In the early days of the pandemic, the economy appeared to be in shambles. Many people were focused on merely surviving, particularly as millions of Americans were suddenly unemployed due to coronavirus layoffs. The idea of finding a new home exited the minds of the population en masse.
However, as time passed and the situation calmed, there was a shift. Aspiring homeowners reentered the market in droves, and sales began to soar. In some cases, sales numbers hit levels that haven’t been seen since before the Great Recession.
If you are thinking of buying a home now, you’re certainly not alone. Here’s a look at how the situation is evolving, as well as why people are hopping back into the market.
Home Starts Skyrocket
One of the biggest changes the market saw was in new home starts. In many areas, COVID-19 brought new construction to a halt due to the rule set forth in shelter-in-place orders.
As those restrictions began to lift, home-building activity returned with a vengeance. In July, new home construction skyrocketed, going up by 22.6 percent over the previous month, and a 23.4 percent increase over the prior year.
While the pace tempered a bit in August, falling 5.1 percent in comparison to the July numbers, that still leaves the activity rate 2.8 percent above August 2019. At a minimum, it signals that new home construction is largely back on track, if not poised to keep exceeding 2019’s figures.
Home Sales on the Rise
New home construction is certainly not the only areas to see solid increases. Existing home sales are also on the rise, with August marking the third consecutive month of gains.
In August, sales were up 2.4 percent over July. Overall, existing home sales saw a year-over-year rise of 10.5 percent, and are now at their highest level since December 2006.
The median sales price is also climbing. In August, it came in at $310,600, marking an 11.4 percent increase over the year prior. With August’s boost, that’s 102 consecutive months of year-over-year gains.
Why People Are Buying
With the economy being a bit shaky in some areas, unemployment still being an issue for many, and the COVID-19 threat still looming, it may seem counterintuitive that people are jumping into the housing market. However, the shelter-in-place orders, work-from-home arrangements, and remote classes for schoolchildren could be playing a role.
Many people are asking more of their homes today than ever before. A house isn’t just a place for rest and relaxation; it’s a classroom, office, and recreation space. People are living, working, and learning in a single building, often with other family members.
For many, those circumstances aren’t changing any time soon. Many companies are planning to have their staff work from home through the rest of the year or longer. Some, including Twitter, are going another route, making the option to work from home permanent.
It also isn’t entirely clear when schools in some areas will fully reopen. Many parents have to prepare for their child’s educational needs, including having space to attend virtual classes and work on assignments. Plus, if an outbreak occurs at a school that has reopened, many children could be sent home to self-quarantine, at least for a few weeks. During that time, it may be back to online classes.
All of these demands may make a household’s current home seem insufficient. Couple that with the Federal Reserve’s expectation that rates will remain near zero, potentially through 2023, and the growth is even less surprising. Many people are jumping on the opportunity to secure mortgages with lower interest rates, allowing them to get a deal while one is available.
How to Safely Buy a New Home
Even with all of the motivators, safety is at the forefront of most homebuyer’s mind. Luckily, there are options that can help you find your new home without undue risk.
Virtual tours are a great option, allowing you to review a property right from home. You can explore a house room-by-room, ensuring you get a full feel for what it has to offer. Additionally, many places are allowing buyers to arrange private tours, giving them the ability to explore a home in-person. If you’re a homebuyer in North Central Florida, GW Homes can help you find your ideal property. You can schedule a private visit or take a virtual tour, allowing you to see everything out new suburban neighborhoods have to offer easily and safely.