It was an unexpected nosedive for the pending home sales index, which dropped to its lowest level since this statistic began to be tracked in 2001. The National Association of Realtors reported that the pending home sales index—a forward-looking measure that gauges signed contracts to buy existing homes—was at an all-time low of 79.7 in May 2020. This falls 5.1 percent from April’s figure and is 15.3 percent below the same month a year prior.
This is an all-time record low and is even more dismal than the depths of the financial crisis of 2008-09. Back then, the housing market bottomed out at 83.5, and the index peaked at its highest point of 112.9 in 2006. What’s concerning is that homes sales declined despite government’s efforts to encourage purchase of homes through mortgage deferments, lower interest rates, and forbearance on monthly payments.
The fierce coronavirus pandemic that imposed stringent restrictions across the U.S. to contain the spread of the virus is the primary factor behind the fall in new home purchases. Nearly 25 million Americans have lost their jobs due to the outbreak, thus eroding their home-buying power. Consumer sentiment is weak, and hesitation in moving to a new home is likely to remain in the near-term.
The tight control over economic activity as a result of the pandemic-linked limitations has caused significant disruption to the housing market. There have been fewer open houses, and existing buyers are less likely to find new homes with limited property viewings. These disruptions have made it difficult for buyers to make decisions, and sellers to get prospective buyers to sign a purchase agreement.
What’s more, there’s a looming anxiety over potential bursts of this infectious disease that could bring business activities to a screeching halt anytime and further slump the market. However, the government initiatives aforementioned are softening the blow to some extent, while some Americans remain hesitant to step into the property market in the wake of job losses and pay cuts.
In conclusion, things could continue to look challenging for the short-term real estate market outlook. The unpredictability of the pandemic will determine the state of the property market in the coming months. However, if the world can manage to contain the virus and the economy experiences a rebound, the housing market in the United States could experience an upturn as well.
It was an unexpected nosedive for the pending home sales index, which dropped to its lowest level since this statistic began to be tracked in 2001. The National Association of Realtors reported that the pending home sales index—a forward-looking measure that gauges signed contracts to buy existing homes—was at an all-time low of 79.7 in May 2020. This falls 5.1 percent from April’s figure and is 15.3 percent below the same month a year prior.
This is an all-time record low and is even more dismal than the depths of the financial crisis of 2008-09. Back then, the housing market bottomed out at 83.5, and the index peaked at its highest point of 112.9 in 2006. What’s concerning is that homes sales declined despite government’s efforts to encourage purchase of homes through mortgage deferments, lower interest rates, and forbearance on monthly payments.
The fierce coronavirus pandemic that imposed stringent restrictions across the U.S. to contain the spread of the virus is the primary factor behind the fall in new home purchases. Nearly 25 million Americans have lost their jobs due to the outbreak, thus eroding their home-buying power. Consumer sentiment is weak, and hesitation in moving to a new home is likely to remain in the near-term.
The tight control over economic activity as a result of the pandemic-linked limitations has caused significant disruption to the housing market. There have been fewer open houses, and existing buyers are less likely to find new homes with limited property viewings. These disruptions have made it difficult for buyers to make decisions, and sellers to get prospective buyers to sign a purchase agreement.
What’s more, there’s a looming anxiety over potential bursts of this infectious disease that could bring business activities to a screeching halt anytime and further slump the market. However, the government initiatives aforementioned are softening the blow to some extent, while some Americans remain hesitant to step into the property market in the wake of job losses and pay cuts.
In conclusion, things could continue to look challenging for the short-term real estate market outlook. The unpredictability of the pandemic will determine the state of the property market in the coming months. However, if the world can manage to contain the virus and the economy experiences a rebound, the housing market in the United States could experience an upturn as well.
