Sales in the coming weeks will show how hard COVID-19 hit the housing market
February saw pending home sales increase for the second month in a row, indicating a "healthy" housing market before the coronavirus lockdown.
Contract signings nationwide rose 2.4% to 111.5 in February and were 9.4% higher than a year ago, according to the National Association of Realtors' Pending Home Sales Index (PHSI).
“February’s pending sales figures show the housing market had been very healthy prior to the coronavirus-induced shutdown,” said NAR Chief Economist Lawrence Yun. “Numbers in the coming weeks will show just how hard the housing market was hit, but I am optimistic that the upcoming stimulus package will lessen the economic damage, and we may get a V-shaped robust recovery later in the year.”
Yun added that inventory would stay longer in the market due to reduced short-term demand, citing realtor.com's active listings data that show year-over-year gains. Colorado Springs, Lafayette, Ind., Modesto, Calif., Rochester, N.Y., and Sacramento, Calif., were some of the markets that drew the most significant buyer attention last month.
“Housing, just like most other industries, suffered from the coronavirus crisis, but once this predicament is behind us and the habit of social distancing is respected, I’m encouraged there will be continued home transactions though with more virtual tours, electronic signatures, and external home appraisals,” Yun said. “Many of the home sales that are likely to be missed during the first part of 2020 may simply be pushed into late summer and autumn parts of the year.”
Annual pending home sales transactions and month-over-month contract signings grew in all four regions. The Northeastern PHSI climbed 2.8% to 96.3 month over month and was 5.9% higher than last year. PHSI in the Midwest jumped 4.5% to 110.1 in February, 14.9% higher than in February 2019.
In the South, the index edged up 0.1% to 129.2 last month, a 7.1% gain from the previous year. The index in the West experienced a month-over-month increase of 4.6% to 97.1 and a year-over-year jump of 10.8%.