Pending home sales tumbled to a record low in April as the coronavirus pandemic hit the housing industry, according to a new report by the National Association of Realtors.
Every major region posted a drop in month-over-month contract activity and a drop in year-over-year pending home sales transactions, NAR reported.
The NAR’s Pending Home Sales Index (PHSI) tumbled 21.8% to 60 in April. Contract signings dropped 33.8% year over year. An index of 100 is equal to the level of contract activity in 2001, NAR said.
“With nearly all states under stay-at-home orders in April, it is no surprise to see markedly reduced activity in signing contracts for home purchases,” said Lawrence Yun, chief economist for NAR.
April’s pending home sales numbers reflect the largest decline since NAR began keeping records in January 2001. However, Yun predicted that April would be the lowest point for pending contracts – and May, therefore, would 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 limited inventory,” he said. “In the coming months, buying activity will rise as states reopen and more consumers feel comfortable about homebuying in the midst of social distancing measures.”
Existing-home sales have also fallen, hitting a decade low in April.