The U.S. housing market began to show signs of slowing in the second half of March as the year-over-year decline in inventory softened, the number of newly listed properties declined and prices decelerated compared to earlier in the month, according to realtor.com’s March Housing Trends Report. The monthly report provides the first data-based glimpse into the impact the COVID-19 pandemic could have on residential real estate as the market enters the spring home-buying season.
“Our inventory and listing data can provide some early insight into how housing markets may be impacted by COVID-19, but the situation and reactions to it are still rapidly evolving,” said realtor.com Chief Economist Danielle Hale. “The U.S. housing market had a good start to the year. Despite still-limited homes for sale, buyers were buying and builders were building. The pandemic and virus-fighting measures appear to be disrupting that initial momentum as both buyers and sellers adopt a more cautious posture.”
Due to the strong start to the month, the number of homes for sale in March overall declined 15.7% year over year, a faster rate of decline compared to the 15.3% drop in February. The impact of COVID-19 materialized in the latter half of March. While the last full week of February showed inventory declining by 16.8% — the largest year-over-year decrease since April 2015 — the weeks ending March 21 and 28, respectively, declined at a slower pace of 15.2% each on a year-over-year basis.
The progression of weekly data hints that sellers may be rethinking or postponing plans to list their home for sale in response to COVID-19. In the weeks ending March 21 and March 28, the volume of newly listed properties decreased by 13.1% and 34%, respectively, compared to the prior year.
Price growth decelerated during the weeks ending March 21 and March 28 compared with the first two weeks of the month. During the last two weeks of March, the median U.S. listing price increased by 3.3% and 2.5% year-over-year respectively, the slowest pace of growth this year, and the slowest since realtor.com began tracking in 2013.
The metropolitan areas which saw the largest declines in inventory were Phoenix-Mesa-Scottsdale, Arizona (down 42.2%); Milwaukee-Waukesha-West Allis, Wisconsin (down 36.2%) and San Diego-Carlsbad, California (-33.4%). Only Minneapolis-St. Paul-Bloomington, Minnesota, which rose 3.6%, saw inventory increase over the year.
