Skip to intro (before main) Skip to main content

May’s Housing Market Rebound Hits Historic Numbers!

When the economy tumbled earlier this year, many feared the housing market was soon to follow. Business closures and stay-at-home orders did significantly decrease the number of sales overall, though prices largely remained steady, particularly here in the Raleigh area. While many predicted a quick recovery once businesses reopened, few saw the historic housing market rebound we’re currently experiencing!

Historic Housing Market Rebound Drives Real Estate

a recovering real estate market

In May 2020, the Pending Home Sales index increased by 44.3%, the highest month-over-month gain in the metric since the National Association of Realtors (NAR) started tracking it in January 2001. So, what exactly does that mean for a housing market rebound?

What is the Pending Home Sales index?

calculating the pending homes sales index

According to the NAR, the Pending Home Sales (PHS) index is one of the strongest indicators of market activity, as it is based on signed real estate contracts for existing single-family homes, condos, and co-ops. This metric records the number of homes that go under contract, which typically happens a few months before the sale is completed.

Why is PHS important?

shaking hands and making an agreement

Beginning in March and continuing into April, the housing market saw a decline in the number of homes that went under contract. However, the current increase of homes under contact shows that buyers are once again active in the market—and they’re not just looking. They’re buying, too.

Homes are always desirable

buyers who recently bought a house

The sharp increase in the PHS also demonstrates the evergreen appeal of homes. No matter what else is going on in the world or in the country, people will always need a place to live. In other words, buyers will always need homes.

The housing market could drive the economy

an electrician working in a home

This sharp incline in the housing market could also be promising not just for the real estate industry, but for the economy as a whole. Buying homes creates jobs—and not just in the real estate industry. There are a lot of companies and individuals involved in the sale of a single home; plus, there is often an increase in spending even after the purchase of the home, should it need any updates, fixes, or even new decor or furniture.

Houses are in low supply

a decline in homes for sale

The housing market is ideally positioned for a quick recovery; however, this recovery could be limited by the extreme shortage of homes for sale. A rise in new construction could help to provide a little relief from the low supply of homes, but there is still a lot of opportunity for sellers looking to make a move.

It’s a great time for home sellers

a home for sale in the Triangle

The supply of homes has been steadily decreasing since July of 2019. The closures and restrictions in response to the COVID-19 pandemic only served to plummet numbers even further. Now, as buyer activity increases dramatically, sellers have a fantastic opportunity to list in a high-demand low-competition market tailored to sellers.

The bottom line? If you’re thinking about selling your home, now is definitely a good time to make a move.

Thinking About Selling a Home in the Triangle?

Are you thinking about listing your Raleigh home? If so, we’d love to help! Contact Linda Craft & Team today at 919-235-0007 to learn more about how we can put our 350+ years of combined experience to work for you.

Leave a Reply

Explore Triangle Areas