If the coronavirus delayed your plans to move, you aren’t alone. Pending home sales soared by 44.3% from April to May, the National Association of Realtors announced on Monday. Sales fell 22% from March to April, as the coronavirus ravaged the real estate market. When lockdowns lifted, pent up demand finally had somewhere to go. May sales were still down by 5.1% year over year.
The National Association of Realtors expects existing home sales to climb to 4.93 million and for new home sales to reach 690,000 in 2020. Figures on new home sales came out last week. Newly built home sales rose 17% monthly in May. But unlike pending home sales, new homes actually rose 13% since last May (perhaps people want to get away from crowded areas?).
‘This has been a spectacular recovery for contract signings, and goes to show the resiliency of American consumers and their evergreen desire for homeownership,’ Lawrence Yun, chief economist for the National Association of Realtors, said in the report. ‘This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery.’
On a regional level, the West had the biggest gain in pending home sales, at 56.2% monthly. Sales in the Northeast region rose by 44.4% since April. Southern states saw a 43.3% monthly increase. In the Midwest, existing home sales climbed by 37.2% month over month.
Mortgage rates are extremely favorable for buyers right now, which is likely also giving sales a boost. According to Mortgage News Daily, rates were around 3.2% at the beginning of May, but fell below 3.0% by the beginning of June. At a meeting in June, the Federal Open Market Committee announced that interest rates would stay low through 2022.