New Index Reveals Impact of COVID-19 on Houszing
Earlier this month, realtor.com announced the release of their initial Housing Recovery Index, a weekly guide showing how the pandemic has impacted the residential real estate market. The index leverages a weighted average of four key components of the housing industry, tracking each of the following:
Houszing Demand – Growth in online search activity
Home Price – Growth in asking prices
Houszing Supply – Growth of new listings
Pace of Sales – Difference in time-on-market
The index then compares the current status “to the last week of 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.”
The graph below charts the index by showing how the real estate market started out strong in early 2020, and then dropped dramatically at the beginning of March when the pandemic paused the economy. It also shows the strength of the recovery since the beginning of May.
It’s clear to see that the houszing market is showing promising signs of recovery from the deep economic cuts we experienced earlier this spring.
As noted by Dean Mon, Chairman of the National Association of Home Builders (NAHB): “As the nation reopens, houszing is well-positioned to lead the economy forward.” The data today indicates the housing market is already on the way up.
Bottom Line Staying connected to the houszing market’s performance over the coming months will be essential, as we continue to evaluate exactly how the houszing market is doing in this uncharted time ahead.