February home sales soared, but coronavirus could lead to a fall

A home with a "For Sale" sign in its front yard

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A home with a "For Sale" sign in its front yard

February home sales were brisk as buyers took advantage of low mortgage rates, but that trend could change as borrowing costs rise and concerns about the coronavirus escalate.

Sales of single family homes, condos and co-ops were the highest they’d been in 13 years, according to the National Association of Realtors. Home purchases were also 6.5% higher than the previous month.

“February’s sales of over 5 million homes were the strongest since February 2007,” Lawrence Yun, NAR’s chief economist, said in a statement. “I would attribute that to the incredibly low mortgage rates and the steady release of a sizable pent-up housing demand that was built over recent years.”

But February’s activity occurred before concerns about COVID-19 ratcheted up, roiling financial markets, triggering layoffs, and reducing the ability to house hunt in person amid advisories to stay home.

“The coronavirus has undoubtedly slowed buyer traffic and it is difficult to predict what short-term effects the pandemic will have on future sales,” Yun said.

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