Empirical Study of Impact from Covid-19 on Real Estate Market in the U.S.

The outbreak of Covid-19 pandemic shocked the global economy substantially, which makes people feel ambiguous about the future trend. In the real estate market, some people lost jobs and have less money to invest while others have more money to invest because of less spending. This research focuses on the impact from Covid-19 on the real estate market in the United States, collecting data from 50 states to measure the degree of the impact, including the Housing Price Index to present the value change of houses, New Confirmed Cases to present how severity the pandemic is in that state, 30-year mortgage fixed rate to present the internal adjustment of real estate market, and real GDP per capita to present the shock on the economy. However, the empirical study does not show a considerable effect from the pandemic on the real estate market, although there is a negative relationship between the two. Compared to the effect of mortgage rate, pandemic plays a tiny role in the change of the Housing Price Index. When new confirmed cases within a state increase by 1,000, the Housing Price Index decreases by 0.0203, but the 30-year mortgage rate increases by 1, the index decreases by 49.05. From the model in the article, the policy for controlling coronavirus in each state would relieve the effect from the pandemic, but a lower mortgage rate is a stimulus to the real estate market.