Housing data that was reported last week still reflects a pre-virus environment. The Case-Shiller Home Price Index is considered the gold standard for home appreciation and features several important indexes, including the National Index which covers all nine U.S. Census divisions and reported a 3.9% annual gain in January. This was an increase from 3.7% in December. Meanwhile, the 20-city Index increased from 2.8% to 3.1% on an annual basis, with Phoenix (6.9%), Seattle (5.1%), and Tampa (5.1%) leading the gains. Due to the lag time of the report and the impact of the pandemic on the economy, this reading has much less significance than it typically does.
Pending Home Sales, which measures signed contracts on existing homes and is a good leading indicator for Existing Home Sales, were up 2.4% in February. This reading was much higher than the -1.6% expected. Sales were also up 9.4% annually, which is the highest pace in 3 years. Unfortunately, many of these signed contracts may have to be cancelled, but it’s currently unclear the amount and details.
However, NAR’s chief economist, Lawrence Yun said, “Housing, just like most other industries, suffered from the coronavirus crisis, but once this predicament is behind us and the habit of social distancing is respected, I’m encouraged there will be continued home transactions though with more virtual tours, electronic signatures, and external home appraisals.”