Pending home sales index falls to lowest in records to 2001

An index of contract signings for purchases of previously owned homes slumped to a record low in April as coronavirus lockdowns thwarted prospective buyers.

Pending home sales decreased 21.8% to a level of 69, the lowest in records back to 2001, after falling 20.8% in March, according to National Association of Realtors data Thursday. The monthly decline was the largest since May 2010 and compared with the median forecast in a Bloomberg survey for a 17.3% drop. Contract signings plummeted 34.6% from a year earlier on an unadjusted basis.

Residential real estate over the past two months, associated with the start of the peak selling season, has suffered from efforts to contain the coronavirus pandemic. At the same time, near record-low mortgage rates are showing signs of rekindling demand, according to separate data on home-purchase applications.

"While coronavirus mitigation efforts have disrupted contract signings, the real estate industry is 'hot' in affordable price points with the wide prevalence of bidding wars for the limited inventory," Lawrence Yun, NAR’s chief economist, said in a statement. "In the coming months, buying activity will rise as states reopen and more consumers feel comfortable about home buying in the midst of the social distancing measures."

Pending home sales dropped sharply from a month earlier in all four U.S. regions, including a 20% decline in the West and a 15.4% slide in the South.