Coronavirus and the Real Estate Market

    Dorothy surely wasn’t thinking of life in a COVID-19 pandemic when she clicked those heels in the “Wizard of Oz” and opined that ‘there’s no place like home.’

    But her words have proven true in 2020. In times of a contagious virus and high unemployment, home ownership and home sales are increasing. That may seem illogical, but not everything in life follows logically in the bizarro world of the coronavirus.

    An Unexpected Boost in Home Sales

    The National Association of Realtors (NAR) reports that home ownership is at its highest rate since 2008. Home sales saw a 20.8% month-over-month increase in June of 2020.

    Lawrence Yung, Chief Economist at the NAR, called the June numbers “quite spectacular.”

    “The number was so large I had to check my database to see when we had such an increase in the past,” Yun said.

    The answer: Never.

    Since the NAR started keeping this data in 1968, no month-over-month increase has been higher.

    “As long as the economy remains open,” Yun said, “the buyers are just ready to go.”

    New home sales increased to its highest total in 13 years. And in July, mortgage applications for home purchases hit an 11-year high.

    Though it is also true that home sales are down 11.3% on an annual basis, the monthly increase matters; in a time of pandemic and high unemployment, people are buying homes at an eye-opening rate.

    Why Home Sales Are Increasing During the Pandemic

    The reasons for the spur involve the Federal Reserve’s response to the pandemic. One of the key moves the Fed made to jumpstart the economy was to lower its interest rates to zero early in 2020. That has borrower’s rates at historic lows. reports in early August that the average rate on a 30-year fixed mortgage is 3.03%. Lenders don’t provide free money, but with rates that low it’s close. On a $300,000 home purchase, a 2% difference in interest rates can save a homeowner more than $100,000 over the 30-year life of a loan.

    The pandemic also has affected buyers’ thinking. Forced to stay at home, younger buyers realized their city apartment was small, especially for those in need of a home office. Homes provide space and yards, which can help when social distancing is required. Worldwide, the trend is no different. Homes in Madrid with a terrace, garden or large common area are growing in demand.

    Monica Alistar, Communications Strategist for, pointed out that the typical post-lockdown homebuyer is a millennial woman aged 25-34 who is seeking more space and Is willing to pay more. Condos have dropped in popularity, but popularity of homes with outdoor amenities like pools, patios and decks increased.

    Interest in moving to rural areas also has grown. reports that property views in rural areas increased by 34% from June of 2019 through June of 2020. People want space and are ready to get away from congestion.

    This growth is not true for all economic levels. Pandemic job losses hit largely in the service sector – think closed hotels, restaurants and bars — but those workers are more likely renting because many are not at a high-enough income level to qualify for a mortgage.

    Those who kept their jobs are seeking more space, for themselves and their families. As the work-at-home movement becomes more permanent, the importance of the home office will grow, which makes the need to reduce commuting time less important.

    Should I Buy a House During the COVID-19 Pandemic?

    There are concerns about how long the house-buying trend will last. Federal stimulus money ran out the end of July, and its future is dependent on the vagaries of Congressional action. The longer the virus lasts, the more difficult things may become.

    Too, a record number of people have sought mortgage relief – 4.3 million in mid-June. Black home ownership also is worrisome; 28% of blacks deferred or did not pay their mortgage compared to 9% of whites. In the first week of August, 33% of homeowners failed to make their full housing payments on time.

    So, is this the right time to buy a house?

    Budgeting must enter into any consideration. If an individual kept his or her job and has regular income, it’s a great time to look. But anyone burdened by debt should evaluate carefully. Heavy credit-card debt, for example, may make adding a mortgage impractical; it may even make qualifying for a loan difficult.

    If you are ready to jump in, be aggressive when you find what you like. Low inventory and high demand make it a seller’s market. Sellers are getting 98.8% of their asking price on average, according to Zillow. The national median home price hit a record $349,000 in July.

    For those thinking about buying a home who are financially positioned to do so, there may not be a better time. However, you must be willing to act quickly and decisively. Rates are low and the market is churning. Attitude and aggressive action mean the right home can be found with the right amenities.

    We may not be in Kansas anymore, Toto, but we surely can find a home wherever we are.


    Bill Fay
    Staff Writer

    Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it seven years ago, helping birth into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering college and professional sports, which are the fantasy worlds of finance. His work has been published by the Associated Press, New York Times, Washington Post, Chicago Tribune, Sports Illustrated and Sporting News, among others. His interest in sports has waned some, but his interest in never reaching for his wallet is as passionate as ever. Bill can be reached at

    In debt? We can help!

    • Amount
    • Type
    • Contact

    How much do you owe?

    What can we help you with today?

    Related Articles

    Second stimulus check on top of the first stimulus check

    Will There Still Be a Second Stimulus Check?

    Remember the second stimulus check?Forget it.Members of Congress have many things on their minds between now and election day, but sending another direct payment of $1,200 to U.S. workers, is not one of them.A second round of COVID-19 relief for ...

    Continue Reading
    Workers lined up for unemployment during the COVID-19 pandemic

    $300 Federal Unemployment Benefits

    When Congress left Washington in early August, they had yet to agree on the specifics of a second stimulus package. They reconvene Sept. 8, and if a deal is reached in the first days or week after returning, you could receive a second stimulus check by early ...

    Continue Reading
    Graduated students with the burden of debt

    Handling Student Loans During the Pandemic

    COVID-19 has put a plug in the nation’s cash flow, forcing graduates to dig deeper into their pockets if they want to avoid drowning in student loan debt.Fortunately, the CARES Act, signed into law on Mar. 23, halts student loan payments and stops ...

    Continue Reading
    Senator Mitch McConnell at a podium

    Details on the HEALS Act

    Congress and the White House are still debating whether the HEALS Act, HEROES Act – or some compromise Act in between – will deliver the next round of coronavirus relief to a wobbly American economy, but at least they’ve set a deadline.Well, sort of ...

    Continue Reading
    Calendar with dart on second stimulus date

    When Will a Second Stimulus Check be Delivered?

    As warring congressional leaders play chicken with the nation’s fifth round of coronavirus-related relief, the only apparent certainty is a second stimulus check will, eventually, find their way into America’s bank accounts.In a perfect world, the ...

    Continue Reading
    Document titled Unemployment Benefits

    New Federal Unemployment Benefits Proposed in the HEALS Act

    If you've lost your job due to the coronavirus crisis, your unemployment benefits are likely to decrease very soon.It's just a question of how much.That will be decided the next two weeks as the Senate and House try to hammer out the differences in ...

    Continue Reading
    Nancy Pelosi at a podium

    Details on the HEROES Act

    When the House of Representative passed the $3-trillion HEROES Act on May 15, it all but guaranteed that a second stimulus check would arrive for Americans in need of financial help for COVID-19.How much that guarantee is worth and when it will be ...

    Continue Reading
    Bankruptcy court with COVID-19 sign

    COVID-19 Bankruptcies

    The storm is coming. American consumers will be filing personal bankruptcies in record numbers by the end of 2020.That is the projection from bankruptcy attorneys, bankers and other experts who project that the COVID-19 era will lead to a historic ...

    Continue Reading
    Get Help Now

    Overwhelmed with debt? You have options for lower monthly payments!