Pending home sales were on the right track

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Pending home sales were on the right track

By HBSDealer Staff - 03/30/2020
Pending home sales increased in February, rising for the second consecutive month.

The National Association of Realtors (NAR) reported that the Pending Home Sales Index (PHSI), is up 2.4% to 111.5 for February. The index is a forward-looking indicator based on contract signings.

Year-over-year contract signings increased 9.4%. An index of 100 is equal to the level of contract activity in 2001.

But the latest report is prior to the coronavirus crisis.

“February’s pending sales figures show the housing market had been very healthy prior to the coronavirus-induced shutdown,” said Lawrence Yun, NAR’s chief economist.

The February 2020 Pending Home Sales Snapshot from the National Association of Realtors shows increases across the nation.

According to Yun, the most recent data does not capture the significant fallout from the pandemic or the measures taken to control the outbreak.

“Numbers in the coming weeks will show just how hard the housing market was hit, but I am optimistic that the upcoming stimulus package will lessen the economic damage and we may get a V-shaped robust recovery later in the year,” Yun said, noting that there will be a lengthier stay of inventory in the market from reduced short-term demand.

Markets drawing some of the most significant buyer attention include Colorado Springs, Colo.; Lafayette, Ind.; Modesto, Calif.; Rochester, N.Y.; and Sacramento, Calif.

The February PHSI on a regional basis is as follows:

  • The Northeast rose 2.8% to 96.3 in February, 5.9% higher than a year ago.

  • The Midwest increased 4.5% to 110.1 last month, 14.9% higher than a year ago.

  • The South inched up 0.1% to 129.2 in February, a 7.1% increase from a year ago.

  • The West grew 4.6% in February 2020 to 97.1, a jump of 10.8% from a year ago.

“Housing, just like most other industries, suffered from the coronavirus crisis, but once this predicament is behind us and the habit of social distancing is respected, I’m encouraged there will be continued home transactions though with more virtual tours, electronic signatures, and external home appraisals,” Yun said. “Many of the home sales that are likely to be missed during the first part of 2020 may simply be pushed into late summer and autumn parts of the year.”


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