Connect with us

Real Estate Big Data

NAR Report: Comparing changes in home buying during COVID-19

(REAL ESTATE BIG DATA) COVID-19 is changing the landscaping of home buying in the U.S. NAR’s new report shows some signs of where it’s headed.



The COVID-19 pandemic has changed pretty much everything for everyone in the U.S., and home buying is no exception.

To see how, the National Association of Realtors added a section to their “2020 Profile of Home Buyers and Sellers” that looks at how the data is shifting. NAR pulled out data on primary home buyers who closed from July, 2019, through March, 2020, compared with those who closed from April through June, 2020. That means the pandemic dataset is based on just 3 months – likely not long enough to call something a major trend but long enough to get an idea of where things are likely to go.

The big picture:

  • Pandemic-era buyers are likely to make more money and pay more for homes. The biggest jump was in the $500,000+ price range.
  • More people want to live with more people. They’re choosing properties suitable for multiple generations, and more unmarried couples as well as unrelated people are buying together.
  • Buyers are spending less time searching before talking to an agent.
  • Having trust in and personal connections with an agent are becoming more important for buyers when choosing someone to work with.
  • 14% of buyers said COVID-19 created some kind of roadblock that impacted the transaction.

To dive a little deeper, here are some of the main takeaways based on the biggest swings in data.

Who’s buying what?

Demographics and household makeup are reshaping demand. Although married couples remain at around 60% of buyers, the next largest group – families with children under 18 – is up by 2 points, as are unmarried couples. Single women, previously the third largest group, have dropped 4 points.

But the big story here is increasing demand for multi-generation homes. Buyers who say they wanted room for taking care of or just spending time with older parents and relatives are up a combined 7 points. (Hello, sandwich generation!)

Multi-Generational Home Purchased Chart (before and after COVID-19)

Unmarried couples and roommates who want to share costs are also trending upwards.

FYI to young adults who plan to move back home: Your parents might not buy a house with room for you and your collection of soccer trophies. “Children/relatives over 18 moving back into the house” as a reason for buying dropped 7 points.

Unsurprisingly, people who make more money are buying more houses; people who make less are buying fewer houses – undoubtedly related to the pandemic’s economic impact. Household median income for pre-pandemic buyers was $94,400 compared to $110,800 from April on.

Household Income of Home Buyers before and during COVID-19

More people are taking the opportunity to move from rentals into buying a home – up a whopping 9 points.

People who identify as White/Caucasian and those born in the U.S. remain the vast majority of buyers; however, Asian/Pacific Islanders are up by 4 points and Hispanic/Latino people are up by 2.

Where are they buying?

Suburbs are hot. Urban areas are still in. Small towns are out.

Specifically, suburbs/subdivisions are up 7 points. Urban areas/central cities are up 2. Small towns are down 7, with a 2-point drop off for rural areas.

We’ve been reading for months now that pandemic-era buyers, especially those who can work remotely, are fleeing cities for suburbs and small, rural towns in the quest for more space, lower costs, and fewer people. NAR’s numbers bear that out for suburbs, but not for small towns and rural areas.

Location of Home Purchased, before and during COVID-19

How much are they paying?

Median price is up significantly, going from $270,000 to $339,400. The pandemic doesn’t appear to have slowed sales, especially in hot markets with tight inventory. People are paying more to get what they want, but prices are rising as demand exceeds inventory.

Prices start to move up in the $350,000 to $399,999 range, with a 3 point jump. The $400,000 to $499,999 range is up by 4 points. It’s the $500,000+ homes that are really taking off, with a 9 point jump to 23% of buyers. High demand and tight inventory were already driving prices upward, but the pandemic is pushing them even higher, as the median price went from $270,000 to $339,400.

Homes from the $199,999 to less than $100,000 range all saw a downturn.

Price of Home Purchased before and during COVID-19

What’s the search like?

Buyers are spending less time in the home buying process searching before getting an agent – now 2 weeks instead of 3 – and typically seeing 8 rather than 9 homes. Most people are still seeing 5 to 10 homes.

What are buyers looking for in an agent?

Trust and personal connections are becoming more important to buyers. The category of “Agent is friend or family member” is up 5 points; “Agent is honest and trustworthy” climbed by 3.
Experience and reputation were rated as slightly less important for home buying.

Most Important Factors when choosing an agent before and during COVID-19

What’s up with lending?

Fixed-rate mortgages continue to reign supreme, but more people are holding on to their cash. Buyers who had no mortgage dropped 5 points. The number of people going for conventional loans headed up by 4 points. There were slight upticks in fixed-adjustable or adjustable rates.

Median percentage financed stayed the same at 88% throughout the 12 months, with the largest group of 80% to 89% financed seeing a slight drop. Most movement was in the 70% to 79% range, which went up by 5. So buyers are putting down more cash, but fewer people are putting down all cash.

Getting a mortgage appears to be getting harder, but the numbers aren’t clear on why. Looking at reasons for denials, low credit scores dropped 18 points and unverifiable income dropped by 8 points. But the category of “other” climbed 21 points, leading to the question of whether some new, pandemic-related reasons have popped up.

Mortgage Application had been rejected from mortgage lender, before and during COVID-19

It will be interesting to see whether these nascent trends continue into 2021, but it will always be important for real estate pros to keep on top of trends. Knowing where things are going can help agents refine marketing strategies, identify potential niches and, most importantly, make sure they’re giving clients the best possible service.

Real Estate Big Data

Housing starts stagnate, market conditions are rapidly shifting

Housing starts for April stagnated, marking the second consecutive months of declines, and more renters being left out of this shifting market.



construction home growth housing starts

Housing starts stagnated in April, down 0.2% from the prior month, according to the U.S. Commerce Department.

The sentiment appears to be that although this marks the second straight month of dips, most are seeing today’s news as a positive, especially as construction of new homes was expected to fall 2.4% in April.

Further, housing starts are up 14.6% from April of last year, driven primarily by multifamily construction.

But it’s worth not getting overly excited, given that permits dipped 3.2% in April which is a forward-looking indicator, so expect starts to continue cooling in a time where we quite need the inventory.

Demand for housing inventory remains high, but the National Association of Home Builders reports today that confidence in the single-family housing market fell dramatically in May, marking the lowest level in two years.

Dr. Lawrence Yun, Chief Economist at the National Association of Realtors said in a statement, “The worst of the housing shortage is ending, but market equilibrium between supply and demand is still some ways off.”

He notes that as mortgage rates increase, builders “are chasing rising rents, with fewer homebuyers and more renters being forced to renew their leases,” noting that even prior to the interest rate increases, rents were rapidly rising and vacancy rates rapidly declining.

Pointing to another market shift, Dr. Yun notes that “Some degree of a return to the office is also fueling back-to-city living where high rises are concentrated.”

That’s a problem.

“Even as home sales look to trend back to pre-pandemic levels after the big surge of the past two years,” concludes Dr. Yun, “inventory will not return to pre-pandemic conditions. That means home prices will get pushed even higher in the upcoming months, albeit modestly, given the supply-demand imbalance.”

Continue Reading

Real Estate Big Data

Home prices jump double digits in majority of American metros [report]

(REAL ESTATE) Housing affordability was already a widespread challenge before current economic pressures were applied, but now home prices are skyrocketing.



homeownership home prices

As home sales slide and mortgage rates rise, home prices in 70% of 185 measured metros saw a double digit annual increase in Q1, according to the newest data from the National Association of Realtors (NAR), up from 66% in the previous quarter.

The Southern region accounted for 45% of home sales in Q1, and experienced a 20.1% increase in annual home prices (compared to 14.3% just the quarter prior). Home prices in the Midwest jumped 8.5% annually in Q1, while The Northeast rose 6.7%, and the West increased 5.9%.

The median sales price of a single family existing home has now hit an astonishing $368,200.

“Prices throughout the country have surged for the better part of two years, including in the first quarter of 2022,” said NAR Chief Economist, Dr. Lawrence Yun. “Given the extremely low inventory, we’re unlikely to see price declines, but appreciation should slow in the coming months.”

Yun expects supply levels to improve, and for “more pullback in housing demand as mortgage rates take a heavier toll on affordability,” given that “there are no indications that rates will ease anytime soon.”

At first blush, price appreciation sounds lovely to anyone that owns a home, given that it is the largest investment most Americans will ever make.

But regarding today’s report, several homeowners told us that they now feel trapped, and that if they sold their current home, even if they purchased a new house at that same price, they would likely have to downgrade.

Affordability is an ongoing problem weighing down the housing sector. NAR reports that the monthly mortgage payment on a typical existing single-family home with a 20% down payment rose to $1,383 (up $319, or 30%, from one year ago). Families now typically spend 18.7% of their income on mortgage payments (but only spent 14.2% one year ago).

“Declining affordability is always the most problematic to first-time buyers, who have no home to leverage, and it remains challenging for moderate-income potential buyers, as well,” Dr. Yun observed.

Map of how home prices are behaving nationally

Continue Reading

Real Estate Big Data

Office occupancy is on the rise, but its knocking down morale

(BIG DATA) Despite work from home policies still in place and the flexibility some employers are offering, office occupancy is increasing steadily.



Empty startup office with open floor plan, abandoned while working from home.

As coronavirus numbers dwindle and some officials begin calling for a fourth COVID-19 shot, more and more people previously working at home after being kicked out of shuttered office buildings are returning to the bullpen.

The National Association of Realtors reports that more than 80% of metro areas in the United States have seen an increase in in-person working.

Boston saw the largest office occupancy growth over the past year. Chicago, New York and Washington, D.C. have the most open space.

NAR researcher Scholastica Cororaton says office occupancy is also increasing in areas with a big tech presence. San Jose, San Diego, San Francisco and Seattle lead those areas.

“The rising occupancy in these tech metro areas indicates that tech companies are contributing to the demand for office space,” Cororaton wrote. “Even as nationally, 45% of mathematical and computer workers work from home for at least some part of the time.”

The way companies are returning to work vary and are sparking anger. For instance, Google employees must now be in the office three days a week. On the other hand, Apple begins its return to office plan next week. It starts with employees coming back one day a week which will eventually grow to two days and then three days a week. Apple employees have revolted against the idea and are have threatened to quit.

Many in leadership are pleased with the return to the office to boost productivity and collaboration. However, employees are finding they’re showing up in person to just log in to Zoom again, which has stirred up even more frustration.

On top of the redundancy of work that could be done at home, a study shows only 3% of white-collar employees want to work in the office all week. 86% want to stay home for at least a few days.

Plus, the return to the office drives up costs, with gas prices seeing soaring and inflation at a 40-year-high.

Since the second half of 2021, 30 million square feet of office space has been taken up, however, about 100 million square feet remain.

NAR reports filling that space up again could take through the end of 2024.

Continue Reading

Our Partners

Get The Daily Intel
in your inbox

Subscribe and get news and EXCLUSIVE content to your email inbox!

Still Trending

Get The American Genius
in your inbox

subscribe and get news and exclusive content to your email inbox