The housing market continues to show positive signs of recovery, according to realtor.com’s weekly Housing Market Recovery Index, yet the effects of COVID-19 still remain a concern.
The index is set to 100 for the last week of January and a value of 100 means the market has recovered to the pace seen that month. Housing demand, home prices, pace of sales and inventory are all positively climbing, although still lower than that January baseline.
The Housing Recovery Index reached 95.8 nationwide for the week ending June 27 and 12 of the 50 largest markets are showing recovery, with the greatest occurring in Boston, San Francisco, Seattle, Denver and Philadelphia.
In terms of regions, the Northeast surpassed the recovery benchmark this week, the report said. The report also said that Midwest economies lagged due to struggling economies while Sunbelt markets with worsening COVID-19 conditions are also struggling.
The index measure the recovery at 110.7 for the Northeast, 93.9 for the Midwest, 95 for the South and 103.3 for the Western regions.
This week’s new listings index reached 90.9, considerably low as housing supply is still slim.
Housing demand has bounced back as summer home-buying is in full-force, with that part of the housing index reaching 119.5. The index also revealed that the pace of sales, or time on market, reached 85.9.
“Improvement in the pace of sales remains highly dependent on cities’ ability to successfully contain COVID cases and safely reopen their economies,” the report said.
Meanwhile, the home price component also moved further past the recovery threshold, with this week’s index reaching 102.6 – as COVID-19 treks on and housing inventory remains constricted, leading to home prices rising.
In the U.S., the overall weekly index value is calculated as a weighted composite of four indexed components, including “housing demand,” based on realtor.com online search activity (10%); “home prices” based on median list prices (30%); “housing supply” based on new listings (30%); and “pace of sales” based on median time on market (30%).