Like most of the news surrounding the COVID-19 global pandemic, reports about the U.S. housing market have been discouraging. Year-over-year listings of homes for sale have plummeted – in the worst-hit markets like New York City, listings are down 80% compared to April 2019.
Home sales began to slow down dramatically in the last half of March, and are expected to drop even more drastically in April and May, which are usually two of the months with the highest volume of home sales. Pending home sales are off over 30%. And over 3 million homeowners have applied for mortgage payment forbearance, causing at least some concern about a large number of potential defaults at the end of the forbearance period. None of this should be surprising, under the circumstances. With almost every state in the country implementing some form of shelter-in-place order and shutting down most non-essential businesses, more than 25 million citizens filed for first-time unemployment benefits over the past four weeks.
With the majority of businesses closed or running below capacity, the consumer spending that accounts for 70% of the U.S. economy has contracted suddenly and severely, and economic projections for Q2 U.S. GDP are universally ugly.