The impact of the coronavirus is showing up in housing market activity. Pending home sales plummeted 21% m/m in March, which points to existing home sales falling to just over 4m annualised in April. We expect they will eventually bottom out closer to 3m. Admittedly, mortgage applications for home purchase recovered over the second half of April, but with large parts of the country still shut down that won’t translate into higher sales. Mortgage delinquencies will match the highs seen during the financial crisis, but foreclosures will be far lower. A lack of forced sales will provide some support to house prices, but a collapse in price expectations means growth will slow from 4.2% y/y to around -4.0% y/y by early next year.
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