Contracts to buy existing homes plunged in March by the most since 2010 as the coronavirus forced people to stay at home and the economy spiraled down.
An index of pending home sales fell 20.8% from February, according to National Association of Realtors data released Wednesday. The median forecast in a Bloomberg survey of economists called for a decrease of 13.6%. Compared with a year earlier, contract signings dropped 14.5% on an unadjusted basis.
“The housing market is temporarily grappling with the coronavirus-induced shutdown,” which reduced listings and purchases, Lawrence Yun, NAR’s chief economist, said in a statement.
March historically begins the annual peak U.S. selling season as warming weather spurs home searches and families with children prepare for moves during the school summer break. That’s been drastically curtailed in 2020 as the virus triggers the biggest economic contraction in decades, closing workplaces, schools and other activities.
February’s pending sales index was the highest in three years, even as stocks plunged from record highs amid the first signs the pandemic was hitting the economy. The downturn accelerated in March as state and local officials imposed restrictions on gatherings and business operations, including in-person home showings. More than 10 million workers filed unemployment claims in the last two weeks of March, a total that swelled to 26 million Americans through April 17.
That didn’t halt all deals, as buyers sought to take advantage of low interest rates while sellers benefited from elevated prices.
Pending home sales are leading indicators of housing activity, based on signed contracts to buy single-family homes, condos and co-ops, typically occurring one or two months before closings.
Contract signings plummeted in all four major U.S. regions, including a 19.5% drop in the South and a 26.8% retreat in the West.
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