Despite the unprecedented disruptions in the U.S. real estate market caused by COVID-19, civil unrest and the recession, the U.S. housing market continues to recovery, according to realtor.com’s just-launched Housing Recovery Index.
The proprietary index leverages a weighted average of realtor.com search traffic, median list prices, new listings and median time on market and compares it to the January 2020 market trend as a baseline for pre-COVID market growth. The overall index is set to 100 in this baseline period. The higher a market’s index value, the higher its recovery and vice versa.
For the week ending June 6, the index was 88.8 nationwide, 11.2 points below the January baseline and up 1 point over the prior week. The slight increase in this week’s overall index represents a 5.7-point increase over the 83.1 low point in the index, which occurred during week ending May 2.
“By combining online search activity along with price and supply dynamics, the index functions as a robust leading indicator of housing activity, and a symptom gauge as we move toward healthier market conditions,” Javier Vivas, director of economic research for realtor.com.
This week’s index reading also reveals the recovery trend was not impacted in the 11 markets that saw the largest number of protests the week ending June 6. On average, these markets saw their recovery index increase 0.7 points over the prior week, ending May 30. New York’s index rose 4.9 points in the index, with Chicago increasing 4.7 points. Los Angeles posted a 0.2-point gain.
“The general sentiment from consumer surveys is that now is not a good time to sell a home because of COVID, economic uncertainty, and social unrest, but the data is saying the opposite,” said Danielle Hale, chief economist for realtor.com. “Home prices are back to their pre-COVID pace and we’re seeing listings spend slightly less time on the market than last week. But the housing market still needs more sellers in order to meet the surge in demand. Looking forward, if we don’t get the inventory we need, we’ll see prices rise even more and homes sell faster later this summer.”
