COVID-19-related shutdowns helped underpin home prices in March

by Candyd Mendoza22 Apr 2020

Even though coronavirus has started to weaken some US markets, other housing markets show no signs of slowing down in home-price growth.

Home prices across the country continued to climb at an annualized rate of 5.8% to a median home value of $252,597 month over month in March, according to the Radian Home Price Index (HPI).

The index also increased by 7.7% year over year, slightly higher than the year-over-year increase of 7.4% posted last month. Radian said that the impact of COVID-19 has yet to materialize on home prices despite the pressure most markets went under in the latter half of March.

“US housing values remained well supported in the early days of the COVID-19 pandemic. While that could change going forward, data indicates that the impact may vary significantly by region and locality,” said Steve Gaenzler, senior vice president of data and analytics at Radian.

The national median value for single-family and condominium homes also rose consistently in the first quarter, up 6.28% due to limited supply and strong consumer demand.

Regionally, the West has the strongest performance, up 6.91% in the first quarter. The South followed with a 6.62% annualized gain. The Northeast lagged at 1.95%, while the Mid-Atlantic was the only region that reported a slight decline.

Metros hard-hit by coronavirus like New York and Philadelphia have shown deceleration in price growth, while Seattle or San Francisco showed no signs of weakness in pricing despite being under shelter-in-place orders for the majority of March.

"Completed real estate transactions in March reveal little out of the ordinary in the real estate market prior to the near nationwide stay-at-home mandates in the second week of March," Radian wrote in its analysis. "Before then, in most U.S. metropolitan areas, the number of daily closings, listings, and homes going into contract tracked very closely to the same time period in the prior year. In fact, listings sold in March were 5% higher nationally than in the similar 2019 period. However, data reported in the final two weeks of March showed declines of 40-50% in new listings and properties going under contract in some areas."