Pending home sales sank 21.8% on an adjusted basis in April compared with March and were down 33.8% compared with April 2019, due to the coronavirus pandemic, according to the National Association of Realtors.
It was the second consecutive month that pending home sales dropped.
Regionally, and month-over-month, contract signings plummeted 48.2% in the Northeast, 15.9% in the Midwest, 15.4% in the South, and 20.0% in the West – however, NAR notes that the rate of decline in each region is flattening.
“With nearly all states under stay-at-home orders in April, it is no surprise to see the markedly reduced activity in signing contracts for home purchases,” says Lawrence Yun, chief economist for NAR, in a statement.
However, Yun expects that April will be the lowest point for pending contracts, and the month of May, consequently, will be the lowest point for closed sales.
“While coronavirus mitigation efforts have disrupted contract signings, the real estate industry is ‘hot’ in affordable price points with the wide prevalence of bidding wars for the limited inventory,” Yun says. “In the coming months, buying activity will rise as states reopen and more consumers feel comfortable about home buying in the midst of the social distancing measures.”
A sign that buyers’ comfortability may be growing is seen in NAR’s most recent Flash Survey, as 34% of Realtors reported successfully completing nearly all aspects of transactions while adhering to social distancing procedures.
An in another positive development, new listings were up in April from one year ago in 34 metro areas, including Virginia Beach, Va., Sioux Falls, S.D., Odessa, Texas, Summerville, Ga., and Las Cruces, N.M.
“Given the surprising resiliency of the housing market in the midst of the pandemic, the outlook for the remainder of the year has been upgraded for both home sales and prices, with home sales to decline by only 11 percent in 2020 with the median home price projected to increase by four percent,” Yun says. “In the prior forecast, sales were expected to fall by 15 percent and there was no increase in home price.”