The recent pandemic has taken the world by storm and affected people’s lives in a multitude of ways. Every industry has suffered a major setback - some industries more than others. The housing market, however, has not collapsed as many expected. While there was a slight dip, it quickly recovered and has been relatively stable. This is due to the reason that most of the homeowners and homebuyers postponed their decision of selling and buying houses, respectively. vHomeInsurance did an in-depth analysis of the impact of the ongoing pandemic on the real estate market and mortgage industry.
Many homebuyers have been trying to take advantage of the situation, hoping that the home prices will drop. However, to their dismay, house values have risen by 4.3% from the previous year. Homeowners are playing the waiting game and have halted their decisions about selling their homes. This is evident from the study that revealed new listings of homes for sale dropped by 70% in major cities like New York. Similarly, web traffic to real estate sites has dropped drastically by 40%. The struggle for survival and to have a sustainable lifestyle has made people avoid making critical decisions such as buying and selling of homes.
The mortgage industry also suffered a major setback when the weekly mortgage applications dropped by 17.9% during the month of January. The impact was most severe during the month of April, with the majority of the U.S states witnessing a decline in mortgage interest approval rate when compared to the previous year. However, it quickly recovered in May, with most of the states witnessing an increase in mortgage interest approval rate compared to the previous year.