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The Resilience of the US Housing Market During the Pandemic

US Housing Market Performance During the Pandemic

As the Covid-19 pandemic continues to ravage the world, few industries have been as severely impacted as the housing market. Despite facing unprecedented challenges, the US Housing Market continues to maintain buoyancy and favorable market conditions.

This article provides an overview of the US Housing Market with a primary focus on its recent performance during the pandemic and other recent changes.

Housing Market Performance During Pandemic

Despite the pandemic’s devastating impact on global economies, the US Housing Market has defied expectations, posting solid sales and value growth. This is due to a confluence of factors such as low-interest rates, higher demand for housing, and limited supply.

Housing Sales and Values

According to the National Association of Realtors, existing home sales jumped 9.4% in September to a seasonally adjusted annual rate of 6.54 million units. This marks a second consecutive month of double-digit growth, representing the largest year-over-year increase since May 2010.

In contrast, new-home sales increased by only 4.8% in August after soaring to 13.7% in July. The low-interest rate environment is one of the major drivers of the surge in home sales.

The Federal Reserve has kept interest rates near zero since March, which has led to cheap borrowing costs for prospective homebuyers. This has helped to stimulate demand, which, in turn, has driven up home values.

Demand and Prices

Demand has also been buoyant due to changing attitudes towards homes’ importance, given the pandemic’s impact. With employees working from home and students engaging in remote learning, home amenities such as home offices, exercise areas, and backyards are more attractive than ever before.

This shift in demand has led to residential prices reaching record highs. According to the Federal Housing Finance Agency, national housing values increased 6.5% year-over-year in July, representing the highest rate in 14 years.

This trend is expected to continue, with experts predicting a sustained increase in home values, putting added pressure on an already limited housing supply.

Recent Changes in Housing Market

In addition to the pandemic’s impact, other recent changes have impacted the US Housing Market.

Interest Rates

Interest rates play a factor in the housing market, with low rates spurring demand and higher ones discouraging buyers. The average rate for a 30-year fixed-rate mortgage remained below 3% in October 2020, despite increasing slightly from the record low of 2.81% in September.

Experts predict that interest rates will likely remain low for the foreseeable future, providing further impetus for the housing market’s growth.

Hot Markets

Some markets such as small towns and suburbs have experienced extraordinary growth due to shifting attitudes towards the importance of the home. According to the Redfin Housing Market Report, small towns have seen a 30% year-over-year increase in home sales while suburban areas have recorded a 16% increase compared to the same period in 2019.

Supply Chain Disruptions

Supply chain disruptions have also impacted the housing market, especially in new home construction. The disruptions have been precipitated by Covid-19 related closures and delays in logistics which have raised the prices of building materials, leading to increases in home building costs.

This has constrained construction rates, compounding existing housing supply issues.

Home Values

Despite nationwide median home values rising sharply during the pandemic, sub-markets and growth disparities exist across the US housing market. For instance, some cities and metropolitan areas are experiencing minimal home value increases coupled with limited demand, contributing to widening growth disparities.


The US Housing Market has shown remarkable resilience amid the pandemic, recording significant home sales and value growth. Contributing factors include low-interest rates, scarcity of supply, and increased demand.

This growth is occurring amid other changes, including hot markets, supply chain hiccups, and growth disparities among sub-markets. Despite the challenges posed by the pandemic, the US Housing Market is likely to remain attractive to investors and prospective homebuyers for the foreseeable future.

Median List Price and Median Sale Price

The median list price and median sale price are two of the most essential metrics in real estate. The former measures the midpoint of all properties listed for sale in an area while the latter measures the midpoint of all properties sold in an area.

This section offers an overview of these metrics with a focus on their recent trends.

Increase in Median List Price

The median list price is one of the critical indicators of a seller’s expectations and the state of the housing market. Amid the pandemic, median list prices have increased in some areas.

According to, for the week ending October 31, 2020, the national median list price for a home rose by 11.1% year-over-year to reach $350,000. This is despite an overall decrease in the number of homes for sale.

This increase in median list price can be attributed to several factors. Low-interest rates and a shortage of supply have led to increased demand from buyers, raising seller expectations.

The pandemic has also played a role, with homeowners valuing space and privacy more than ever before.

Decrease in Median Sale Price

While the median list price has been increasing, median sale prices have been decreasing in some markets. According to Zillow, the national median sale price for a US home was $259,906 in August 2020, representing a 0.4% YoY decrease.

This decrease has meandered in the past few years, accelerating slightly with the onset of the pandemic. The decrease in median sale price can be attributed to several factors, including the ongoing economic uncertainty, new construction competition in certain markets, and the gradual cooling of buyer expectations.

However, it is important to remember that specific conditions in individual markets may also affect the overall average.

Disparity Between List and Sale Price

In some markets, there is a disparity between list and sale prices. This is often the result of a mismatch between seller and buyer expectations.

In general, sellers tend to overvalue their homes when listing them for the first time. With high demand and low inventory, sellers are pricing their homes with seller’s markets in mind.

However, in many markets this has begun to shift. Buyers who are unable or unwilling to purchase at the price sellers expect may choose to wait out the market or purchase elsewhere, leading to slower sales and price adjustments.

Homes Sold Above List Price and Below List Price

The percentage of homes sold above and below the list price provides insights into how competitive the housing market is and which way the market is skewed.

Percentage of Homes Sold Above List Price

The percentage of homes sold above list price has been an important metric in recent years, with many markets experiencing fierce competition for inventory. According to Zillow, in 2018, 22.5% of US homes sold above list price, signifying a competitive buyers’ market.

This percentage increased to 24.5% in 2019, showing that buyers were willing to pay more than the asking price amid low inventory levels.

Year-Over-Year Decrease of Homes Sold Above List Price

However, with the pandemic, the percentage of homes sold above list price has decreased in many markets. According to data compiled by Redfin, in August 2020, just 22.4% of homes sold above the asking price, representing a 12.9% YoY decrease in transactions.

This cooling can be attributed to buyer’s growing expectations, fewer property offers and inventory constraints.

Homeowners and Equity

As home prices rise, homeowners see their home equity increase. Home equity is the percentage of a home’s value that is owned outright by the homeowner.

This equity can be accessed through a variety of means, including refinancing, home equity loans, and home equity lines of credit. Real estate industry experts consider building equity through real estate investment a viable way of building long-term financial security.

As home values increase, so does a homeowner’s net worth, making real estate a popular way of building long-term wealth.


The median list price, median sale price, percentage of homes sold above and below list price, and homeowner equity are essential metrics in real estate. The increase in median list price and decrease in median sale price in some markets suggest a cooling in the markets.

Disparity between list and sale prices can also reveal mismatches in seller and buyer expectations. As such, it is vital for buyers and sellers to undertake thorough research into their real estate market to ensure that they are adequately prepared for the real estate industry’s dynamics.

Share of Listings with a Price Cut

The share of listings with a price cut is an essential metric that provides insights into the current state of the housing market. In this section, we will discuss recent trends in the share of listings with a price cut, highlighting the factors responsible for the changes.

Increase in

Share of Listings with a Price Cut

The share of home listings with a price cut increased in some markets amidst the pandemic’s economic impact. According to, the percentage of active home listings with a price cut rose by 2.6 percentage points year-over-year in June 2020, up from 26.1% in June 2019.

These changes came a few months after many cities nationwide were put in quarantine due to Covid-19, and further decline in the economy spurred by part-time closures. Slow markets or longer transaction periods often lead to price cuts.

As the economy cools, homeowners looking to sell face increased market competition and require more attractive pricing.

Correction in Markets and Expectations of Sellers

The share of listings with a price cut may be an indication of a market correction. In some housing markets, there was a price bubble that led to overvaluing homes.

As the market adjusts, these houses may need price correction to sell. Additionally, the increase in the share of listings with price cuts can be attributed to seller expectations that are misaligned with the current market realities.

For instance, sellers may anticipate home valuation based on a booming market or overvaluation of property. As buyers reject such high-priced properties, sellers may lower prices in an effort to lure buyers.

Inventory and Supply Chain Holdups

The share of listings with a price cut may also be impacted by inventory. In some markets, construction backlogs, supply chain holdups, workforce disruptions, and material inefficiencies have delayed home construction, resulting in a shortage of available inventory.

A scarcity of inventory puts upward pressure on prices and creates a sellers’ market. However, it is important to watch for any changes in market dynamics brought about by unforeseen events, such as the ongoing pandemic and its economic impact, which may signify overvaluation and require price cuts.

Average and Median Price Cuts

Understanding the average and median price cuts is useful in determining the state of the housing market. In this section, we will provide an overview of these metrics.

Average Price Cut for Housing Prices

The average price cut is the difference between the original listing price and the final sale price. According to Zillow, the national average price cut for a home was 2.3% in June 2020.

This marked a slight increase compared to June 2019, showing that sellers are making modest adjustments to make their homes more appealing to buyers.

Year-Over-Year Decrease of Average Price Cut

However, the economic impacts of the pandemic resulted in a decrease in the average price cut. According to, the average price cut for US homes fell to 2.6% in June 2020, down from 3.1% in June 2019.

The fall in the number of average price cuts can be attributed to strong demand from buyers, primarily fueled by low-interest rates, which has kept home prices stable.

Median Price Cut for Housing Prices

The median price cut is the midpoint of all price cuts in a particular area. According to Zillow, the median price cut in the United States was 2.7% in 2019, representing a decrease from the previous year’s median price cut of 2.8%.

However, this metric has also seen changes due to economic factors. During the pandemic, the median price cut increased slightly to 2.8%, indicating some downward adjustments to home values to meet the current market needs.


The share of listings with a price cut can fluctuate based on many factors, including supply and demand, market expectations, and inventory. It is an essential metric in determining the state of the real estate industry, providing insights into both buyer and seller behavior.

Understanding the average and median price cuts is also useful in comprehending the state of the market, as they inform the level and direction of price shifts over time. Overall, the price cut metric is a valuable tool to assess market dynamics and guide investments in the real estate industry.

For-Sale Inventory

For-sale inventory refers to the number of homes available for sale in a given area. It is one of the most important metrics in the real estate industry, as it helps to gauge the level of supply and demand, and estimate the state of the market.

In this section, we examine current trends in for-sale inventory, the impact of supply chain disruptions on construction and inventory levels, and the implications for the housing market.

Current Number of Homes for Sale

As of October 2020, there are approximately 1.47 million homes for sale in the United States, according to This represents a decrease of 36.4% from the previous year.

The ongoing pandemic has played a role in this condition, as sellers are reluctant to list homes due to Covid-19 concerns. Additionally, the supply chain has been affected, contributing to lower inventory levels.

End of Supply Chain Holdups and Increased Construction

The end of supply chain holdups and increased construction will be important to create more for-sale inventory in the US housing market. As supply chains normalize, construction companies will have access to materials and demand an increase in new home listings.

This shift will have a positive impact on inventory levels, resulting in an increase in the number of homes available for sale. However, due to the impact of the pandemic, including slowdowns and limitations of construction practices, it may take some time for this positive shift to occur.

It is likely that inventory levels will remain relatively low in the near term, ensuring home prices remain solid throughout the winter.

Impact of Inventory on the Housing Market

The supply of homes for sale has a significant impact on the housing market. A shortage of inventory means that buyers will face competition, leading to bidding wars and higher prices.

Conversely, an oversupply of homes means that sellers may struggle to find buyers, resulting in lower prices and longer time on the market. In essence, a balance between supply and demand is essential for a stable housing market.

Conclusion and Methodology

Taking note of these data points is essential to establishing a strong real estate investment strategy. Ultimately, identifying accurate and up-to-date information is key to making informed decisions.

However, it’s essential to have the assistance of a professional who understands these data points’ implications on the broader market and beyond. Such a professional can help you navigate the changing market dynamics, utilize available market data, and maximize your investment opportunity.

Zillows March 2023 Data and Single-Family Residences

Zillow’s predictions can give us some insight into what the future holds for the housing market. In their March 2023 data report, Zillow predicts that the median home value will increase by 6.4%, totaling $230,432.

While Zillow’s predictions give us a snapshot of the future market, it’s essential to note that they are subject to change based on the prevailing economic conditions.

Collection and Date of Data


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