“Home Sales Plunge to Unprecedented Lows: A Troubling Outcome Worse than the Financial Crisis

The real estate market has seen a tremendous shift in recent months, with pending home sales dropping to a record low. This bad news comes at a time when many people are taking advantage of the low interest rates and taking the leap into the real estate market. Low pending home sales indicate that while there is some interest in purchasing a home, the sale is not going through. Data from the National Association of Realtors, or NAR, shows that pending home sales in the United States dropped by 21.8% annually in April 2020. This is a significantly greater drop than during the financial crisis of 2008-2009, where the annual decline in pending home sales was at 16%. When compared to the same time period in 2019, the current decline stands at 34.6%. Economists believe that the decrease in pending home sales can be attributed to the widespread economic uncertainty as a result of the coronavirus pandemic. Many potential buyers are now unsure as to how the pandemic will affect their finances, and are thus more reluctant to take the plunge into the real estate market. The same uncertainty is causing sellers to be cautious in putting their home on the market, leading to a decrease in both buyer and seller interest. While the pandemic has caused the real estate market to struggle, there are still promising signs of recovery. Prices for existing homes have remained relatively steady despite the decrease in pending home sales. It is possible that the current low interest rates are enticing buyers to get into the market, although it remains to be seen if this will be enough to offset the effects of the pandemic. Overall, the decrease in pending home sales is a sobering reminder of the economic consequences of the coronavirus pandemic. Current and prospective homeowners should consider their financial situation before entering the real estate market, as the uncertainty created by the pandemic may cause further disruptions to the housing market. With the right research and financial planning, the market can adapt and weather the pandemic-induced storm. The real estate market has seen a tremendous shift in recent months, with pending home sales dropping to a record low. This bad news comes at a time when many people are taking advantage of the low interest rates and taking the leap into the real estate market. Low pending home sales indicate that while there is some interest in purchasing a home, the sale is not going through. Data from the National Association of Realtors, or NAR, shows that pending home sales in the United States dropped by 21.8% annually in April 2020. This is a significantly greater drop than during the financial crisis of 2008-2009, where the annual decline in pending home sales was at 16%. When compared to the same time period in 2019, the current decline stands at 34.6%. Economists believe that the decrease in pending home sales can be attributed to the widespread economic uncertainty as a result of the coronavirus pandemic. Many potential buyers are now unsure as to how the pandemic will affect their finances, and are thus more reluctant to take the plunge into the real estate market. The same uncertainty is causing sellers to be cautious in putting their home on the market, leading to a decrease in both buyer and seller interest. While the pandemic has caused the real estate market to struggle, there are still promising signs of recovery. Prices for existing homes have remained relatively steady despite the decrease in pending home sales. It is possible that the current low interest rates are enticing buyers to get into the market, although it remains to be seen if this will be enough to offset the effects of the pandemic. Overall, the decrease in pending home sales is a sobering reminder of the economic consequences of the coronavirus pandemic. Current and prospective homeowners should consider their financial situation before entering the real estate market, as the uncertainty created by the pandemic may cause further disruptions to the housing market. With the right research and financial planning, the market can adapt and weather the pandemic-induced storm.