As more and more states begin to re-open stores, restaurants and business, many are wondering how the real estate summer market will look like. Buyers are hoping for more inventory, and Sellers for positive news, and it just looks like this summer season is ramping up to be a busy one!

According to the Mortgage Bankers Association, mortgage applications for home purchases rose to 8.7% year over year last week, as buyers rushed to secure a low-mortgage rate in preparation for the summer buying season.

“This is a bit of a bigger rebound than I expected,” says realtor.com® Chief Economist Danielle Hale. “It’s a sign that we are going to see a delayed seasonal bump in home sales. There’s pent-up demand from people who weren’t able to get out in the early part of the spring, and we’re seeing that [materialize] now.”

Hale points out that usually, sales rise during March & April, but due to the Covid-19 crisis, many people were unable to purchase a home or were unwilling to risk selling one. She says that instead of early in spring, we will be seeing activity pick up in June & July.

Realtor.com attributes this to people becoming more comfortable with Covid-19 protocols when showing homes, and that sellers are listing more now that states are lessening restrictions. On top of all that, mortgage rates are at an all time low at 3.08%.

“The low mortgage rates, without a doubt, is helping to entice buyers back into the market,” says Lawrence Yun, chief economist of the National Association of Realtors®.

Buyers are also not afraid to take our big loans, as the average loan size rose to $340,000 in the past week, up from $315,000 back in April.

Here in California, purchase applications were only down about 1.7% in the month of May.

Hale warns that even with positive data, it’s far too soon to predict a huge spike in the housing market.

“I’d want to wait a couple of weeks so we know that this is really a trend and not a one-time blip,” says Hale.

There is still a significant housing shortage that has made buying an affordable home difficult, and the coronavirus crisis has made inventory worse. Plenty of sellers pulled their properties off the market or prefer to wait to list until the crisis is over, making it more difficult for buyers to purchase.

This could lead to higher prices during the summer, but Hale says that prices could also level off in the late summer, and if the Coronavirus re-surges in the fall, even drop towards the end of the year. However, she is clear about prices not falling drastically due to demand remaining high.

Source: “The Summer Home-Buying Season May Be Much Hotter Than Expected—Here’s Why” Realtor.com.