Housing Supply and Liquidity in the COVID-19 Era

Justin Contat
Malcolm Rogers
Federal Housing Finance Agency

The analysis and conclusions are those of the authors alone and should not be represented or interpreted as conveying an official position, policy, analysis, opinion, or endorsement of either the Federal Housing Finance Agency or the U.S. government. Any errors or omissions are the sole responsibility of the authors.

This report documents changes in national housing supply and liquidity during the COVID-19 era using a suite of monthly indices, ranging from summary statistics (mean and median time on the market, proportion of homes sold, etc.) to more advanced econometric indices that can address censoring and unobserved heterogeneity. The results indicate a sharp structural break in most of the indices near the start of COVID-19 in March 2020, though each index’s most likely break date varies by a few months.

The findings suggest that the start of the pandemic saw a supply decrease, followed by an immediate and sustained price increase. Listings became more likely to be withdrawn, but those that sold did so faster relative to pre-COVID-19 levels, indicating a change in the distribution of housing market liquidity. Finally, the results suggest that there were different types of structural breaks, specifically changes in the level, slope, and seasonality of the indices.