Pending home sales increased 2.4% month-over-month in February and were up 9.4% from a year earlier, according to the National Association of Realtors (NAR) Pending Home Sales Index. The index rose in all four major regions of the country.
The greatest increase was recorded in the West, where contract signings increased 4.6% in February, followed closely by the Midwest, where there was an increase of 4.5% over the month.
In the Northeast, pending home sales increased by 2.8%, and in the South, there was a slight 0.1% increase.
All four regions also charted higher pending sales this February than a year earlier.
The NAR noted that some of the most active markets were Colorado Springs, Colorado; Lafayette, Indiana; Modesto, California; Rochester, New York; and Sacramento, California.
However, while all of these positive numbers would normally have experts looking toward the spring homebuying season with high expectations, this year “will be anything but normal for the housing market,” said Danielle Hale, Chief Economist at Realtor.com.
The February numbers reveal a market that was “very healthy prior to the coronavirus-induced shutdown,” said NAR Chief Economist Lawerence Yun with the release of the Pending Home Sales Index Monday.
“Housing, just like most other industries, suffered from the coronavirus crisis,” Yun said.
“With COVID-19 hampering travel and in-person interactions, home sales are expected to slow in April and May, what are normally busy spring months,” Hale said. “Some of this activity will likely be shifted to later in the year, but when is still an open question.”
Yun is reportedly optimistic that the market will experience some recovery later this year, perhaps even seeing a comeback by late summer or autumn. He is hopeful that the “upcoming stimulus package will lessen the economic damage and we may get a V-shaped robust recovery later in the year.”
A historic $2.2 trillion stimulus plan to help Americans and the overall economic recovery from the slowdown induced by the coronavirus passed both the House and the Senate and was signed by President Trump. Some of the bill’s main features are providing financial relief to businesses, sending stimulus payments directly to individual Americans, and expanding unemployment benefits.
Yun believes “once this predicament is behind us and the habit of social distancing is respected, I’m encouraged there will be continued home transactions through more virtual tours, electronic signatures, and external home appraisals.”
So far prospective homebuyers do not seem to be turned off by the current conditions. A survey of prospective homebuyers found 35% are still keeping an eye on the housing market, and 22% say they will restart their search when the coronavirus impact has lessened.