Pending home sales drop to a record low, even worse than during the financial crisis
The pending home sales data released by the National Association of Realtors on Tuesday shows that the index of pending home sales in March dropped to its lowest reading in history, even lower than during the 2008 financial crisis.
The index measuring pending home sales was down 21.8% year-over-year, and 21% from February, indicating a large drop in potential sales. This is due to the continued spread of the coronavirus and the government mandates encouraging people to shelter in place and social distance, both of which have caused a pause in the housing market.
In response, the NAR’s Chief Economist, Lawrence Yun, commented that “the depressed number is the new reality from the coronavirus. Residential real estate remains in a lockdown phase, experiencing an almost total standstill in transactions.”
He expects the housing market to slowly recover as the government takes steps to mitigate the spread of the virus and relax restrictions, but that a true recovery might not be until the fall. He also recommends that Congress pass a new round of aid to assist those financially impacted by the virus to help jumpstart the process.