Even though COVID-19 has helped bring down rates, many home buyers still struggle to find affordable homes for sale
In an analysis that looked into affordability of current for-sale homes and inventory in 100 top metros, realtor.com found that there are only two metros where affordability and lack of listings are the least of most homebuyers' worries.
Compared to Q1 2019, the available for-sale homes nationwide were 8% more affordable in Q1 2020 thanks to record-low interest rates, according to the REALTORS Affordability Distribution Score. Despite the increased affordability, buying a home in most markets became harder as housing supply continued to be a headache for many. Inventory of homes per 1,000 households nosedived 53% from the 20-year average.
The average of homes listed for sale was less than half from the long-term historical average of 17 listings per 1,000 households. At the end of the first quarter, just eight homes were listed for every 1,000 households.
Several historically affordable metros reported a significant drop in their listings amidst the coronavirus outbreak, including Buffalo and Rochester, NY., Columbus, Ohio, Springfield, Mass., and Harrisburg, Pa. At the low end, Buffalo had 2.5 listings for every 1,000 households, and Harrisburgh at the high end had 3.6 listings per 1,000 households.
Des Moines and Baton Rouge were the only metros affordable and well-supplied enough, with more than 10 active listings per 1,000 households and an affordability score of at least 1.00. Des Moines has 10.9 listings per 1,000 households and an affordability score of 1.03, while Baton Rouge has 11.7 listings and a 1.00 affordability score.
Other relatively affordable metros with at least 10 active listings per 1,000 households and an affordability score of at least 0.80 were Atlanta, Virginia Beach, Va., Jacksonville, and Lakeland, Fla.
"The lack of affordable homes for sale has been the number-one issue facing homebuyers for the last several years," said realtor.com Chief Economist Danielle Hale. "The COVID-19 pandemic has eased the affordability side of the equation by lowering interest rates, but it has also prompted many sellers to delay listing their homes. As buyers return, we'll need to see sellers come back for the housing market to normalize."
