Key Highlights

  • Pending Home Sales Index jumped +44.3% from April to May
  • This monthly gain the biggest ever reported by National Association of REALTORS®
  • Index down -5.1% year-over-year

The National Association of REALTORS® (NAR) just reported the biggest gain in monthly pending home EVER. NAR’s Pending Home Sales Index (PHSI) jumped a HUGE +44.3% from April to May after this Index collapsed in April due to COVID-19.

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Lawrence Yun, chief economist with NAR, said, “This has been a spectacular recovery for contract signings, and goes to show the resiliency of American consumers and their evergreen desire for homeownership.” Additionally, Yun said, “This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery.”

The PHSI came in at 99.6 in May. And index level of 100 would be equal to the comparable contract activity happening in 2001.

Because of this latest PHSI level, NAR now projects that existing home sales could reach 4.93M in 2020 and new home sales to hit some 690,000. NAR believes 2021 could be even better with 5.35M existing home sales and 800,000 new home sales. For comparative information, existing home sales hit 5.34M in 2019 so it makes sense that on a y/y basis, the current PHSI for May 2020 was down -5.1%.

Pending home sales rebounded sharply in all regions of the country with a monthly jump of +56.2% in the West and +43.3% in the South.

Ever cautious, Yun said, “More listings are continuously appearing as the economy reopens, helping (consumers) with inventory choices. Still, more home construction is needed to counter the persistent underproduction of homes over the past decade.”

 

Thanks to the National Association of REALTORS®, BloombergNews and InmanNews.

 

Also read: Is Reopening Enough to Save Economy?, Zillow Predicts Home Prices to Fall -2-3% in 2020…Plus More, 5 Cities with Good Investment Potential in 2020