Is Housing Demand Bouncing Back?
In an unexpected but very much welcome turn of events, pending home sales recently flipped positive after plummeting nearly 40 percent below the same time last year in early April. Though the pending sales are still 32 percent lower annually, the uptick may represent the beginning of the market's recovery. Housing professionals cannot yet point to what is causing the growth in pending home sales even during high levels of unemployment, but a few preliminary contenders are the strengthening stock market, the possible flattening of the pandemic’s curve, and the awareness of virtual tools that minimize the risk of infection.
Sales of both newly built and existing homes tanked in March, as potential buyers hunkered down and potential sellers pulled their homes from the market, both watching their economy in free fall from the coronavirus.
Now, suddenly, buyer demand at least may be climbing back.
Pending home sales — a measure of signed contracts, not closings — are about 32% lower annually now, according to research by Zillow. But the week-over-week change in pending sales turned positive in the week ending April 15. Pending sales were up 6.2% week over week as of the seven days ending April 19.