Earlier this month, realtor.com announced the release of their initial Housing Recovery Index, a weekly guide showing how the pandemic has impacted the residential real estate market that tracks the U.S. housing recovery nationally and in the 50 largest metropolitan areas.
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 median list prices
- Housing Supply – Growth of new listings
- Pace of Sales – time on market for homes
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 dramatically at the beginning of March when the pandemic paused the economy.
Here is the data for Connecticut as well for the Hartford area. You can see in the graph below we started off the year strong dropping dramatically as well but now almost back to the baseline back in February.
What this shows is the strength of the recovery since the beginning of May. It’s clear to see that the housing market is showing promising signs of recovery from the deep economic cuts we experienced earlier this spring.
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.”
We can see that the data today indicates the housing market is already on the way up.
Staying connected to the housing market’s performance over the coming months will be essential, as we continue to evaluate exactly how the housing market is doing in this uncharted time ahead.