We reached bottom in Spring. Now what?

COVID-19 has rained on the otherwise-hot Spring home selling season. Just a quick recap on how big an impact the housing market has absorbed: late April and early May the decline of home sales activities reached the bottom; in May, median home price dropped year over year for the first time since 2012 and price per square foot dropped 3.4%. Now, the Spring season is over, where are we in July and moving forward?

First of all, I have good news for the buyers. Things actually start to slow down, even though the pent-up demand for housing has been assisting the housing market recovery. New mortgage application has been decrease for a few weeks. This means fewer people are buying now and buyers, you have less competition. The mortgage rate is still at all-time low, hovering around 3%.

National Association Realtor (NAR) chief economist Lawrence Yun also reminded us how strong the housing market was before COVID, much stronger than other sectors. He mentioned in his recent article on economy that "In the first quarter, when the gross domestic product contracted by 4.8%, the residential investment component...from home sales, home construction, and remodeling activity grew by 21%."

Look ahead, the home sales will be down nationally this year. Yet NAR forecast the price is still likely to increase. In 2021, the housing market recovery in full swing. Home sales can increase by as much as 15% and price can increase between 4% to 6%. Right now is a fantastic opportunity to get a lower price and a low interest rate.