Coronavirus crisis hit residential Real Estate right before the start of its typically busy spring —but one analyst says there are signs the U.S. housing market could already be on the upswing.
Like nearly every facet of the U.S. economy, real estate took a hit from the spread of the coronavirus pandemic, with home purchase applications plunging and various market gauges, like the NAHB/Wells Fargo Housing Market Index and Fannie Mae’s Home Purchase Sentiment Index, hitting historically low levels.
While the market for buying and selling homes is far from normalcy—as of last week, the volume of weekly applications for a loan to purchase a home had improved week over week but was still down 20% on a year-over-year basis—the market is not without hopeful signs. An assortment of recently-released data from Redfin (ticker: RDFN) and Zillow (ZG) “suggest that the U.S. residential real estate market may be past the worst in terms of COVID-19 impact, and is starting to recover,” Tom White, senior research analyst at D.A. Davidson, wrote in a May 1 note. The analyst reaffirmed Buy ratings for Zillow, Redfin and eXp World Holdings (EXPI), all digital real estate companies.
White cites Redfin’s measure of home-buying demand as one promising sign. The seasonally-adjusted metric, which compares the number of daily homebuyer inquiries to the January and February average, dropped as low as 34% in March, but is now down only 15% for the week ending April 26, the analyst writes. For Full Article featured in Barons click here
