The US housing market is far from crashing in 2020 or 2021. In fact, it continues to play an important supportive role in the country’s economic recovery. Current economic conditions resemble a “swoosh” pattern, with the initial impact from the lockdown followed by a gradual recovery as the economy reopens. Mortgage rates and slow but steady improvements to the job landscape continue to propel confidence for first-time buyers.

If the reopening is followed by another wave of the COVID pandemic leading to a shutdown, the “double-dip” is a possible result (W-shaped recovery). In either case, the overall outlook points to declining rent growth in the short term followed by a gradual period of recovery.

Let's first see how various consumer surveys are responding in wake of this crisis. The Federal Reserve Bank of New York's Center for Microeconomic Data released the November 2020 Survey of Consumer Expectations, which shows that households are reporting a decline in income and spending growth expectations and a mixed labor market outlook.

Median inflation expectations in October decreased from 3.0% to 2.8% at the one-year horizon and remained unchanged at 2.7% at the three-year horizon. The decline was driven by higher-income respondents (household income above $100,000).

Median home price change expectations, which have been trending upward after reaching a series' low of 0% in April 2020, were unchanged at 3.1% in October.

Median one-year ahead expected earnings growth remained unchanged at 2.0% in October, for the third consecutive month. The series remains well below its 2019 average level of 2.4%.

Median expected household income growth decreased by 0.3 percentage point to 2.1% in October. Since February, this series has moved within a narrow range from 1.9% to 2.3%, well below its 2019 average of 2.8%. The decrease was driven by respondents without a college education.

Median household spending growth expectations decreased from 3.4% in September to 3.1% in October, which was the same as its February 2020 level.

Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—decreased from 36.4% in September to 35.4% in October, its third consecutive decline. The decline was driven by respondents without a college education.

The pace of existing-home sales has jumped to a level not seen since 2006 and, importantly, was followed by strong pending sales, purchase mortgage applications, and construction data. As Federal Reserve has made clear that it has no intention of raising interest rates soon, many households are seizing the opportunity to refinance their existing mortgages.

Historically, low-interest rates are also an inducement to buy homes, but slow supply growth continues to result in high levels of home price appreciation, which is offsetting some of the affordability benefits of the lower rate environment, according to the Fannie Mae Economic and Strategic Research (ESR) Group.

The Fannie Mae Home Purchase Sentiment Index® (HPSI) increased 0.7 points in October to 81.7, rising for the third consecutive month and continuing the rebound from late spring. The index which measures housing attitudes, intentions, and perceptions, using six questions from the National Housing Survey® (NHS), is a good indicator of the recovery and buyer and seller behavior.

Year over year, the HPSI is still down 7.1 points but it has recovered more than half (60%) of the early pandemic-period decline, mirroring the strong home purchase activity of the past few months.

Three of the six HPSI components increased month over month, with consumers reporting a more optimistic view of both home buying and home-selling conditions, in addition to expecting mortgage rate declines. However, consumers also reported greater pessimism regarding their personal finances and employment outlook.

The latest survey finds out that those who think it’s a ‘good time to sell a home’ feel so because of the following reasons:


29% of them feel so because of high home prices.

24% of them feel that it is a good time to sell because of favorable mortgage rates.

7% feel it's easy to qualify for a mortgage.

16% feel that as not many homes are available you can sell your home fast.

11% feel that current economic conditions are conducive to selling a home.

The latest survey finds out that those who think it’s a ‘good time to buy a home’ feel so because of the following reasons:

51% of them feel that it is a good time to buy because of favorable mortgage rates.

13% of them feel so because of low home prices.

12% feel that many homes are available for buyers.

11% feel that current economic conditions are conducive to buying a home.

3% feel it's easy to qualify for a mortgage to buy a home.


Zillow's market pulse report dated November 20, 2020, shows that the existing home sales continued to surge in October on the strength of enduring buyer demand. Low mortgage rates, which have partially fueled this demand, fell even lower. And jobless benefit applications remain elevated after increasing from last week.

Existing home sales in October rose 4.3% from September and 26.6% from a year ago, to 6.85 million (SAAR), according to the National Association of Realtors.

Pending home sales data do point to some cool down to come, but by now it’s clear.

The median existing-home price rose to $313,000 in October, up 15.5% from October 2019 — the fastest annual rate of price appreciation since October 2005.

Ellie Mae – a software company that processes 35% of U.S. mortgage applications – reported the average mortgage rate on closed loans in October was less than 3%, the first time.

1.1 million initial claims for jobless benefits were filed last week, 55,000 more than the week before.

12 million people are due to lose their benefits at the end of December unless some programs are extended.


Mortgage delinquencies improved again in October, falling to 6.44%, the lowest level since March. Despite five consecutive months of improvement, there are still more than 3.4 million delinquent mortgages, nearly twice as many as there were entering the year, according to Black Knight.

October’s 4,700 foreclosure starts marked a nearly 90% year-over-year reduction as widespread moratoriums remain in place, while active foreclosure inventory set yet another record low at 178,000. Record-low interest rates again pushed prepayment activity higher, with October’s prepayment rate of 3.17% setting the highest single-month mark in more than 16 years.

U.S. rental payment rates appear to be staying afloat. The National Multifamily Housing Council found 90.3 percent of apartment households made a full or partial rent payment by November 20 in its survey of 11.5 million units of professionally managed apartment units across the country.

This is a 1.6 percentage point, or 183,431 household decrease from the share who paid rent through November 20, 2019, and compares to 90.6 percent that had paid by October 20, 2020. These data encompass a wide variety of market-rate rental properties across the United States, which can vary by size, type, and average rental price.

Realtor's Housing Market Recovery Index Foresees No Crash

According to's latest recovery report, the Housing Market Recovery Index remained steady at 112.8 nationwide for the week ending November 28th, up 2.2 points over the prior week. With fewer people on the move and more time spent at home during the Thanksgiving holiday, housing activity saw a boost compared to the same time in the previous year.

The housing index is pegged to a starting point of 100 at a particular year. And then they can just track whether things are improving or declining from that reference point. It’s similar to any other index where you have a starting point or a starting year and you peg it at a hundred and it just goes up and down from there.

It went up for most of March, and then it hit this peak and came down rapidly and fast over the course of essentially the end of March, April, and right through to the beginning of May where it bottomed out.

So after May 1st, that index started to go up, it passed 85 in mid-May and then continue to work its way up rather quickly. The recovery index had reached 106.6 nationwide for the week ending July 18, bringing the index above the pre-COVID recovery benchmark for the first time since March, and then it just kept going up from there. As of November 28th, it is now 12.8 points above the pre-COVID baseline and up 2.2 points over the prior week.

Locally, demand and supply continue to recover in most regions of the country. Apparently, home buying interest may be starting to grow slower than seller confidence in parts of the West and Northeast. The West saw its Supply Index increase by 9.6 points and its Demand Index increase by 5.0 points.

Similarly, the Northeast saw its Supply Index increase by 4.9 points, and its Demand Index increase by 1.0 points. The moves however are well short of solving the shortage of options for buyers.

48 markets have crossed the recovery benchmark as of this week, one less than the previous week. The overall recovery index is showing the greatest recovery in Los Angeles, San Jose, Boston, San Francisco, and Seattle, largely driven by improvements to the inflow of both buyers and sellers. This week, only Nashville, Oklahoma, and Buffalo remained below the baseline.