U.S. Sales of Previously Owned Homes Dropped in May

Bloomberg writers Vince Golle and Reade Pickert reported today that, “U.S. sales of previously owned homes dropped in May by more than forecast to the lowest level since October 2010 as the coronavirus pandemic sent demand skidding along with the rest of the economy.

“Closing transactions decreased 9.7% from the prior month to an annualized pace of 3.91 million, data from the National Association of Realtors showed Monday. The median forecast in a Bloomberg survey of economists called for a 4.09 million rate. Compared with a year ago, purchases were down 26.6%, the biggest annual slide since February 2008.”

The Bloomberg article noted that, “Even with the decline in contract closings, more recent data have shown the housing market is rebounding and becoming a bright spot for the economy. Home-purchase loan applications have spiked recently in part because of record-low mortgage rates, though millions of job losses and still-lean inventory make it unlikely that sales will soon rival February’s 13-year high.”

Previously owned home sales account for about 90% of U.S. transactions and are calculated when a contract closes. New-home sales, which make up the remainder, are based on contract signings and May data will be released Tuesday.”

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