March was a turning point for the United States as, state by state, the COVID-19 outbreak led to shelter-in-place orders across the nation. In fact, according to The New York Times, by the end of March, more than 80% of the population across 32 states had been urged to shelter-in-place.[i] As a result, while some housing activity still showed increases this month, by and large key housing indicators have turned down.
Single-family housing authorizations increased year-over-year, though this seemingly notable increase is relative to the 2019 housing slump. Meanwhile, existing housing activity, which encompasses maintenance and remodeling—a subset of maintenance that includes renovations, additions, and alterations—declined substantially. Declining residential construction activity is likely to drive increased economic turbulence as the housing shortage grows.
New and Existing Housing Supply Activity, March 2020
- Single-family housing authorizations increased 6.62% year over year.
- Existing housing maintenance volume decreased 7.99% year over year.
- Existing housing remodel volume increased 11.50% year over year.
“The biggest unknown we’re facing in the housing market right now is how the COVID-19 recovery will play out,” said Jonathan Kanarek, managing director of BuildFax, a Verisk business. “This outcome relies heavily on the political and social decisions made over the next few months. Beyond that, while construction employment was one of the hardest hit sectors, it will also be one of the most important factors to aid economic recovery. In fact, prior to the outbreak, demand for new homes was so high we were facing a major housing shortage and the housing industry was gearing up for a strong spring home buying season. While COVID-19 will dampen that enthusiasm in the short term, we are expecting to see a strong showing when shelter-in-place orders are lifted.”
Download the full report for a deep dive into how housing activity has reacted to progression of the COVID-19 outbreak.
[i] Sarah Mervosh, Denise Lu and Vanessa Swales, “See Which States and Cities Have Told Residents to Stay at Home,” The New York Times, April 7, 2020, <https://www.nytimes.com/interactive/2020/us/coronavirus-stay-at-home-order.html>, accessed on April 8, 2020.