Contract signings fell 20.8 percent monthly and 16.3 percent year-over-year, according to data released by the National Association of Realtors (NAR) Wednesday. The Pending Home Sales Index (PHSI) is currently at 88.2, the lowest it’s been in years. But despite the bleak news, NAR predicts that the numbers will bounce back as economies restart.
“The housing market is temporarily grappling with the coronavirus-induced shutdown, which pulled down new listing and new contracts,” NAR Chief Economist Lawrence Yun said in a statement. “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.”
All four regions in the U.S. saw drops in the number of contract signings. The West saw the greatest drop in March, down by 26.8 percent for the month and 21.5 percent year-over-year. The Midwest, the South and the Northeast all saw drops of 22 percent, 19.5 percent and 14.5 percent in March, respectively.
NAR found that, as lockdown and stay-at-home orders have been limiting the type of real estate work that can be done, more agents have been using technology to continue to sell. Fifty-eight percent of Realtors said buyers are using virtual tours while 43 percent said their buyers have used e-closings.
“Although the pandemic continues to be a major disruption in regards to the timing of home sales, home prices have been holding up well,” he said, adding that the median home price could rise by up to 1.3 percent for the year. “In fact, due to the ongoing housing shortage, home prices are likely to squeeze out a gain in 2020 to a new record high.”