A Promising Increase in Housing Demand [Real Estate Insider]

One way that experts evaluate the health of our economy is by looking at the real estate market. There are other indicators, such as the stock market and GDP numbers, but the real estate market helps determine whether people can afford to buy a home, which is a good indicator of their financial health. 

Several economic indicators would suggest that the US economy is struggling to make progress due to the impact of COVID-19. The stock market has seen a significant decline and is trying to recover, and unemployment numbers reached record highs during the peak of the pandemic. 

The housing market seems to have eluded the effects of COVID-19 when August produced another increase in total housing demand. The number of mortgage applications increased by 3% in August, with a total increase of 25% from this time last year. 

Housing Demand Soars

This is good news for the economy. One explanation for the high buyer's demand is that people are thriving and looking for a better home. It also shows that people aren't scared to go out and buy a home, given the current circumstances. As long as the proper steps are taken to allow for safe home tours and mortgage transactions, there's no reason to be worried about getting out there and buying a new home!

Since last August, the 25% increase in mortgage applications shows that not only has housing demand recovered from the pandemic, but it continues to grow. This is excellent news if you're looking to sell your home. Unfortunately, the market has been tight because fewer people are willing to sell their homes. 

A strong economy puts individuals who were previously renting or leasing a home in a better position to buy a house and put down roots. The problem with a low housing inventory means they have less options. It may take longer than usual to find a home that meets your expectations. Be patient and wait for the right home to come onto the market. During the waiting period, you can spend some time getting your current home ready to sell, or start packing your things up early. Take advantage of your free time while you wait for the right house to come along, then you can move quickly when it does. 

High-End Housing Leads the Charge

While the market for houses around the median price ($250,000-$350,000) is tight, inventory continues to increase for high-end homes. The US has seen an increase of 44% availability for homes valued at $1 million or more.

One explanation for this increase could be that wealthy individuals have not been impacted by the pandemic as significantly as the middle-class and working-class households. We should start to see the median-level houses follow their lead as the market continues to recover from COVID-19. With the massive demand for housing, if inventory starts to increase, it could be great news for the real estate market. 

Buyer's Want Larger Houses

Many buyers are applying for homes with more square footage than their previous home. With COVID-19 forcing many people to work from home, they can manage a larger space than usual. In fact, they may need more space to accommodate an office area or for their equipment. Many companies have taken advantage of the work-from-home initiative and decided that they will continue working from home long-term. It's a great way to save money on the expenses related to having a physical office. 

Some families have had to transform their homes to fit their new lifestyle. Many kids are forced to stay home rather than go to school, so the parents have had to create a makeshift workspace for their kids as well. It has been difficult for some families to create enough space in their home for a classroom and a functional home office. 

So, the result is homebuyers looking for a new home with the space to fit all of their unique needs. The COVID-19 pandemic has posed many new obstacles for homeowners, and it doesn't seem like they are going away any time soon. The good news? Mortgage rates are trying to stay low, despite the impact COVID-19 has had on the economy, and people have not been afraid to take advantage of it.


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