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Riding on the declining mortgage rates, pending home sales have come around really well, beating all expectations. This further asserts that the housing market is the only silver lining in the Coronavirus-affected economy.
The National Association of Realtors (NAR) has an index that puts the contract signings into perspective. According to it, the signings to buy previously owned houses have shot up 16.6% once again, building on the excellent show in May (44.3% rise).
Lawrence Yun, the chief economist for NAR is surprised. In his statement, he suggested, “It is quite surprising and remarkable that, in the midst of a global pandemic, contract activity for home purchases is higher compared to one year ago”. Sitting at 116.1 in June, the index is at a point untouched since February 2006.
While the housing market offers every sign of beating the crisis before other industries, unemployment levels and the Coronavirus-rebound are still big concerns at this moment. Keller Williams’s chief economist, Ruben Gonzalez has stated that “Housing market activity in June was strong, with buyers benefiting from extremely low mortgage rates that have continued declining all the way through July,” He further added, “If we see a further slowing in the pace of new listings coming on the market as a result of the recent surge in coronavirus cases, and mortgage rates continue to spur demand, we could continue to see upward pressure on home prices.”
The NAR has already raised its existing home sales projection to 5.18 million units from 4.93 million units forecasted in May.