Home sales in the U.S. have fallen to their lowest level in nearly 10 years, a national realtors’ group said Monday.
A report from the National Association of Realtors obtained by Reuters found that home resales, which make up the vast majority of sales, were down 26.6 percent in May from the same time last year. Existing home sales dropped nearly 10 percent last month from the month before, more than three times the drop expected by analysts.
A top economist at MUFG Bank told the news service that the lagging sales were signs of greater damage to the U.S. economy resulting from the coronavirus pandemic. Millions of Americans were forced out of work over the past few months as nonessential businesses shuttered around the country.
“Home sales may bounce with pent-up demand following the shutdown of the economy starting in March, but the massive scale of job losses and cautious consumers rebuilding their savings may limit the sales,” Chris Rupkey of MUFG Bank told Reuters.
Some experts said that home buying could rebound over the summer as the number of homeowners looking to sell increases.
“Although demand certainly dropped in March and April due to the crisis, supply dropped even more, and has thus far kept home prices from declining,” Mike Fratantoni, chief economist of the Mortgage Bankers Association, told the news service. “We expect that home price growth will pick up over the summer due to insufficient supply levels.”
Home sales were dropping earlier this year before the coronavirus pandemic began hitting the U.S. in force, with experts blaming a lack of houses for sale for the sluggish numbers.
“We saw the stock market correction in late February,” the National Association of Realtors’ chief economist said at the time. “The first half of March held on reasonably well, but it was the second half of March where we saw a measurable decline in sales activity.”
“Homes are still selling fast, we just don’t have enough inventory,” he added.