The latest figures on pending home sales reveal that the market is in its worst shape since the financial crisis of 2008. According to the National Association of Realtors (NAR), pending home sales dropped to a record-low level in April, which is even lower than the depths seen during the Great Recession.
The worst of it is concentrated in the western US, as the region experienced the steepest drop in pending home sales. This decline is largely due to the pandemic-induced recession, along with a low inventory of available homes on the market, and high prices preventing potential buyers from entering the market.
The unfortunate trend has created a buyer’s market, as sellers are struggling to make a sale. There are simply fewer buyers looking to purchase a home, and those that remain are typically focused on the lower end of the market. Sellers are having to reduce their list prices and make attractive offers, in order to increase their chances of finding buyers.
Unfortunately, this decline in pending home sales is not likely to turn around anytime soon. With the US economy still struggling and unemployment remaining at a record-high, there is little hope for an improvement in the housing market.
However, there is some good news for buyers. The current atmosphere offers plenty of opportunities for those looking to purchase a home, as sellers are eager to make a sale. Furthermore, interest rates remain low, allowing buyers to get better deals on mortgage loans.
In the short-term, it is likely that the pending home sales market will remain slow. As the economy recovers and unemployment drops, there should be an increase in buyer demand. This should help to stabilize prices, and result in the pending home sales market returning to a healthier state.
