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Go ahead and download the July 2020 Housing Market Update above👆. Now for a little insight on today’s market update…
All of this comes together in the supply and demand questions saying, “What is this going to do to home prices as we go forward?” I think as we look at what experts are saying right now, we have a look at six experts here that are saying, “Okay, as we look forward, what’s going to happen with the pricing of homes this year?” You can see here that, one, the home price expectations are, as we’ll see, in a slight decline there. The five others say, “We will see appreciation,” and then if we look at three of those five say, “Well, we’ll see over three percent appreciation this year.” Then as we go into 2021 and 2022, we see appreciation across both of those years.
If we look at this, as we look at demand, High Frequency came out and said this. “The housing market is likely benefiting from low mortgage rates. Stronger demand for larger spaces as more and more people work from home and desire to move away from crowded cities to avoid exposure to the coronavirus.” We know supply and where that’s at and the upward pressure. We know demand. We’re benefiting from lower mortgage rates. Where literally people can go out today and say, “Hey, based on where mortgage rates are at, we can now afford a home that we couldn’t afford before,” or, “We can afford more of a home and things are more important to us today that maybe weren’t important three or four months ago relative to where we live.”
So, as we look at pricing, we look at the supply and demand across this country. We’re in an undersupply situation currently right now and then we know that demand is being spurred on by low interest rates. But I want to talk a minute about this trend – and Realtor magazine talked about it – of what people are saying is important to them now in a home given the pandemic and given the last several months that we’ve experienced. They say this, “Nearly 30 percent of the respondents they surveyed here living in a high-density urban area say that the pandemic is prompting them to want to move by the end of the year. This is more than double the rate of those living in rural parts of the country where residents are much more likely to stay put rather than to relocate.”
What are they saying right here? People living in denser urban areas want to get out and say, “Okay. We want to live in a less dense area.” Maybe there are things that are important to them if you’re living in a condo or in a high rise and they say, “I want a backyard. I want more space. I want something like that.” We’re seeing that reflective in the surveys that are coming back. As a matter of fact, buyers are showing a greater desire for these non-urban properties and rural areas are leading the way as compared to suburban and urban. You see here in this study that 16 percent growth year-over-year increase and views of properties in rural areas versus suburban and urban areas. That shift of, “This is now important to us as we look for a new home.”
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