NAR Expects Rebound, But Not Enough to Recover Spring Buying Season
Washington, D.C. (PPD) — The Pending Home Sales Index (PHSI) fell 20.8% in March, more than the consensus forecast. The National Association of Realtors (NAR) called all four regional drops “expected declines as a result of the coronavirus outbreak.”
Forecasts for ranged from a low of -15.0% to a high of 0.8%. The consensus forecast was -10.0. Year-over-year, contract signings declined 16.3%. An index of 100 is equal to the level of contract activity in 2001.
“The housing market is temporarily grappling with the coronavirus-induced shutdown, which pulled down new listings and new contracts,” said Lawrence Yun, chief economist for NAR. “As consumers become more accustomed to social distancing protocols, and with the economy slowly and safely reopening, listings and buying activity will resume, especially given the record low mortgage rates.”
The Northeast PHSI fell 14.5% to 82.3 in March, down 11.0% from a year ago. In the Midwest, the index decreased 22.0% to 85.6 last month, down 12.4% from March 2019.
“The usual Spring buying season will be missed, however, so a bounce-back later in the year will be insufficient to make up for the loss of sales in the second quarter,” Mr. Yun added. “Overall, home sales are projected to have declined 14% for the year.”
Pending home sales in the South declined 19.5% to an index of 103.7 in March, a 17.8% decline from March 2019. The index in the West plummeted 26.8% in March 2020 to 71.4, down 21.5% from a year ago.