As expected, California home sales fell in May to the lowest level since the Great Recession as the housing market suffered the full impact of the coronavirus pandemic in May and remained below 300,000 units for the second straight month. At the same time, pending sales increased 67.2% from April as the incremental relaxation of shelter-in-place orders coupled with record low mortgage rates boosted interest in housing. According to C.A.R.’s monthly California Housing Sentiment Index, the percentage of consumers who thought it was a good time to buy a home increased to 32 percent last month, a high for the series that began capturing data in September 2018.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 238,740 units in May. May’s sales total was down 13.9 percent from 277,440 in April and down 41.4 percent from a year ago, when 407,330 homes were sold on an annualized basis. The year-to-year drop was the largest since November 2007, contributing to a year-to-date sales drop of 12.9 percent.

The pace of growth for California pending home sales has continued to tick up, but at particularly slow speeds: under 3 percent in three of the four past weeks. And the number of new homes added to the MLS has been essentially flat for the past month, suggesting sluggish sales to come in the next few weeks. Nationwide, according to Redfin CEO Glenn Kelman, homebuying demand is up 25 percent from pre-pandemic levels.

Despite the pandemic, the Mortgage Bankers Association says mortgage applications are up 13 percent from a year ago. Last Thursday, the average rate on the 30-year fixed mortgage fell to a new record low of 2.97 percent.

While there are currently 4.66 million borrowers in forbearance nationwide — representing 8.8 percent of all active mortgages — that number has been shrinking for the last two weeks. New data from Black Knight Analytics revealed that the majority of homeowners in forbearance have at least 20 percent equity in their properties, which may provide a protective cushion.