From Realtor Magazine
Pending home sales continued to increase rapidly for the second consecutive month in June despite the COVID-19 pandemic. Based on the Pending Home Sales Index from the National Association of REALTORS®, an increase was seen in the month-over-month contract signings from each of the four major regions in the U.S. as home buyers rushed out to purchase homes across the country.
NAR’s index shows that contract signings increased by 6.3% compared to a year ago.
NAR’s Chief Economist Lawrence Yun said that the contract activity for home purchases is higher compared to a year ago is quite surprising and remarkable considering that we are all amid a global pandemic. Consumers are taking opportunities from the record-low mortgage rates resulting from the Federal Reserve’s maximum liquidity monetary policy.
NAR’s Pending Home Sales Index jumped 16.6% month over month in June to a reading of 116.1.
See snapshot of housing report below:
Yun also said that the strong bounce-back comes after a longer lockdown in the Northeast region. The South, on the other hand, has consistently outperformed the rest of the country. And these remarkable rebounds equate to exceedingly a higher buyer demand.
Upbeat Forecasts for 2020 and Beyond
Because of the recent turnaround in contract signings, NARs adjusted its overall housing forecast. For 2020, NAR is now projecting existing-home sales to decrease by only 3%, with sales increasing to 5.6 million by Q4. New-home sales are projected to increase by 3% this year.
Yun is auspicious that positive GDP growth of 4% in 2021 will drive, on both existing and new, higher home sales. He forecasts existing-home sales to increase by 7% in 2021 and new-home sales to increase by 16%.
Home prices are also projected to increase by 4% in 2020. Yun predicts prices will moderate in 2021 but still increase by 3% as more supply is expected to hit the market.
Low financing costs are expected to continue to attract home buyers. NAR predicts that mortgage rates will stay at or near 3% over the next 18 months.
Full details on Realtor Magazine