As expected, the sales of existing homes dropped and there has been a significant decline in sales since the record set at the start of the year. Back then, all the factors that tend to drive the housing market were in place. There were low mortgage rates and the majority of the population was feeling pretty good about their employment situation. It is true that prices had been coming up, but these were not serving as any sort of inhibition. The new home market was booming as well. The bottom fell out as the shutdown was imposed, but there appears to be hope on the horizon as potential buyers seem to be back in the game. Mortgages are still low and the markets have recovered enough to draw the high-end buyers back. The employment numbers remain a worry, but the majority of those that lost their jobs were not likely home buyers in the short term.
By Chris Kuehl, Ph.D., NACM Economist