In June, realtor.com announced the release of their initial Housing Recovery Index, a weekly guide showing how COVID-19 has impacted the residential real estate market. The index leverages a weighted average of four key components of the housing industry, tracking each of the following:
- Housing Demand – Growth in online search activity
- Home Price – Growth in asking prices
- Housing Supply – Growth of new listings
- Pace of Sales – Difference in time-on-market
The index then compares the current status “to the last week of January 2020 market trend, as a baseline for pre-COVID market growth. The overall index is set to 100 in this baseline period. The higher a market’s index value, the higher its recovery and vice versa.”
The graph below charts the index by showing how the real estate market started out strong in early 2020, and then dropped drastically at the beginning of March (right when the pandemic paused the economy). It also shows the strength of the recovery since the beginning of May.
It’s clear to see that the housing market is continuing to recover at a rapid speed. As noted by Dean Mon, Chairman of the National Association of Home Builders (NAHB):
“As the nation reopens, housing is well-positioned to lead the economy forward.”
The data today indicates the housing market is already on the way up.
Bottom Line
It’s essential to stay on top of the housing market’s performance and recovery in the coming months, as we continue to evaluate exactly how the housing market is doing in the uncertain times ahead.
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