After new home sales suffered their biggest March drop ever, pending home sales were expected to decline by a record amount MoM (-13.7%) in March. However, pending home sales was far worse than expected - plummeting 20.8% MoM and 14.5% YoY
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.
“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.
This is the weakest level since May 2011... after hitting its highest levels since Feb 2017 in February.
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 with the biggest March decline on record.
As Bloomberg notes, 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.