Pending home sales fell 20.8% in March, according to the National Association of Realtors (NAR). Year-over-year contract signings also fell 16.3%.
The NAR attributed these disappointing declines directly to the outbreak of the coronavirus.
Throughout the nation, in every major region, month-over-month contract activity and year-over-year pending home sale transactions declined.
“The housing market is temporarily grappling with the coronavirus-induced shutdown, which pulled down new listings and new contracts,” Lawrence Yun, NAR’s Chief Economist said.
However, Yun was quick to add some apparent hope for a light at the end of the tunnel: “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.”
Yun was careful to then add a warning against looking too far ahead into the future, and with too much optimism, as he shared a harsh reality, including what we can more likely expect in the coming year.
“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. Overall, home sales are projected to have declined 14% for the year,” he said.
Yun then referenced NAR’s April 19-20 Flash Survey in support of his assertion that various modern technological tools are being used by buyers and sellers as a way to connect and continue the purchasing transaction process, while still respecting and abiding by the current regulations present in today’s COVID-19-centric world.
These technology tools referenced include virtual tours and e-signings, which are among the most popularly used. In fact, according to NAR, 58% of its realtors took advantage of virtual tours in order to make their home purchase transactions, while 43% shared that e-closings were utilized.
Yun did provide this positive note of encouragement: “Although the pandemic continues to be a major disruption in regards to the timing of home sales, home prices have been holding up well. In fact, due to the ongoing housing shortage, home prices are likely to squeeze out again in 2020 to a new record high. I project the national median home price to increase 1.3% for the year, though there will be local market variations and the upper-end market will likely experience a reduction in home price.”