Buyers Return to Market

As the COVID-19 pandemic takes additional ground in our culture and economy, it has not had such a profound impact upon the real estate industry.

What appears to be the case is that pent-up buying demand, which was temporarily put on hold for a couple months, is resurfacing. Now buyers appear to be moving back into the market, as is reflected in the number of mortgage applications which rose last week.

According to certain metrics, mortgage applications rose for the third week in a row, climbing 7% from the prior week.

Home prices are down significantly, by 35% on an annual basis, but still overall prices, in many markets, are holding steady. New Jersey’s average single-family home price climbed 11.4% year-over-year in March 2020 and increased over 7% from February 2020.

It appears that refinances are not increasing in demand as traditional mortgages. Refinance applications fell just 2% from the prior week. Refinances still represent the majority of total applications, currently at 70% of all total mortgage applications.

Projections for home prices for 2020, according to Zillow, are expected to fall between 2% and 3%, but they are expected to rebound in 2021.

This projected drop is not as severe when compared to the 27% collapse of home prices during the Great Recession of 2006 to 2012.