Pending Home Sales Shoots Up: The Worst Behind Us For Real Estate?

Summary:
In this video, Task discusses an article about the increase in pending home sales for the month of May, which rose by 44% from April. He explains the context of these numbers in light of the economic shutdown in March and April. While the increase in pending home sales is the highest since 2001, Task shares his skepticism about whether this indicates the worst in the real estate market is over. He touches on the impact of loans in forbearance and defaults on mortgages, and highlights the uncertainty in the real estate market due to factors like tightened lending standards and high unemployment rates.

Detailed Article:
Task begins the video by addressing the recent uptick in pending home sales for May, which surged by 44% from April, breaking the two consecutive months of decline. He attributes this rebound to the reopening of the economy following the shutdown in March and April. He clarifies that pending home sales refer to contracted sales that are yet to be finalized. Task mentions that around 10 million loans entered forbearance, enabling borrowers to delay mortgage payments for six to potentially 12 months, indicating a strategic financial decision for many amidst cash flow uncertainties.

Furthermore, Task differentiates between loans in forbearance and mortgages in default, noting that over four million mortgages are in default, which could lead to foreclosures. Despite the relatively small proportion of homes in default, Task acknowledges the potential impact of foreclosures, especially if compounded by court delays due to the ongoing pandemic.

Task then delves into the broader picture of the real estate market, cautioning against overly optimistic views presented by organizations like the National Association of Realtors, highlighting their tendency to put a positive spin on market conditions. He expresses skepticism about the current state of the market, citing tightened lending standards and staggering unemployment rates in the US. Task presents data on first-time unemployment claims and job losses, emphasizing the significant economic challenges faced by many Americans.

In conclusion, Task advises viewers not to be overly optimistic about the real estate market's immediate future. He anticipates more insights into the housing market's trajectory by the fourth quarter, contingent on economic developments over the next few months. Task emphasizes the need to closely monitor economic trends to gauge the real estate market's resilience in facing the ongoing uncertainties.