Pending home sales in April plummeted a record 21.8% as COVID-19 kept buyers at home. However, April will likely mark the bottom of the slump induced by the pandemic, the National Association of Realtors said in a Thursday report.
The seasonally adjusted index measuring signed contracts fell as COVID-19 disrupted dealmaking, according to Lawrence Yun, NAR’s chief economist. It was the biggest drop since NAR began tracking transactions in January 2001.
April likely will be the bottom for pending contracts and May probably will be the pandemic’s low point for sales because it takes about a month to complete a transaction, Yun said.
“With nearly all states under stay-at-home orders in April, it is no surprise to see the markedly reduced activity in signing contracts for home purchases,” Yun said.
All U.S. regions experienced declines, according to the NAR report. Pending home sales in the Northeast were 53% lower than a year ago, while the Midwest saw a drop of 26% from 2019, the report said.
In the West, pending sales were 37% below a year ago, and in the South, sales were down 30%, NAR said.
Though the pandemic continued to rage throughout the country, 34% of Realtors reported successfully completing nearly all aspects of transactions while adhering to social distancing procedure, the report said. The number was based on a survey of members NAR conducted on May 17 and 18.
“In the coming months, buying activity will rise as states reopen and more consumers feel comfortable about home buying in the midst of the social distancing measures,” Yun said.
New listings were up in April from one year ago in 34 metro areas, including Virginia Beach, Virginia, Sioux Falls, South Dakota, Odessa, Texas, Summerville, Georgia, and Las Cruces, New Mexico, Yun said.