More Good News for Home Sellers This Summer

Last week, we noted that economic indicators suggest that Summer will be a strong season for the housing market, despite being weaker than other years. This article will further bolster that point by looking at the decreasing unemployment rate. 
In May 2020, the unemployment rate dropped to 13.3% from 14.7% in April 2020. This is reflecting the reality that many cities and states are reopening, and furloughed workers are returning to their offices (this is also good for the well-being of state economies, since they are reducing the amount of unemployment being paid out). While these numbers are not even close to ideal (the highest unemployment got during the Great Recession was 10%), they are still significantly better than the projections for that time period. Taken collectively, a myriad of factors are coming together in a way that suggests that the summer will be a very good time for the housing market. 
The housing market is responding to this better-than-expected news by rebounding from historically low sales numbers. The outlook makes sense when you consider the fact that the people who were looking for homes in March in April were forced to abandon their search in light of an economic crisis. The net result is that the March and April buyers are joining the people who were already planning on searching for homes in the Summer; pair that with historically low mortgage rates, and you have a recipe for a robust housing market. 
Evidence of this can be found in the year-over-year increase in mortgage applications; the applications for the week ending on May 22, 2020 were 8.7% higher than the week ending on May 22, 2019, and the applications for the week ending on May 29, 2020 were 17.5% higher than the week ending on May 29, 2019. There is also significant evidence that home sellers stand to benefit from this increase; home prices increased by 3.1% in the last two weeks of May.
Prior to COVID-19, we wrote extensively about the low inventory of homes on the market, and how that impacted housing prices and increased the chances of a bidding war. With significantly more buyers on the market, and a similar amount of inventory, it’s only logical that this reality would be magnified. Summer is coming, and it will be good for home sellers. 
At the Chernov Team we understand that knowledge is power, and knowledge of how the state of the world positively impacts the market for home sellers is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.