The housing market continues to display continued summer strength despite the backdrop of the COVID-19 crisis.
Sales of new single-family homes in June increased 13.8% to a seasonally adjusted annual rate of 776,000 from a revised May rate of 682,000, according to the latest Monthly New Residential Sales report from the Department of Commerce.
The latest figures are also 6.9% above the June 2019 estimate of 726,000.
“While Wall Street may have been expecting a smaller gain, anyone following the NAHB/Wells Fargo Housing Market Index would know these numbers are in line with what we are hearing from builders,” said Chuck Fowke, chairman of the National Association of Home Builders (NAHB). “Builders are moving to ramp up production to meet growing demand.”
Last week's Builder Confidence report saw builder sentiment reach pre-pandemic levels. A day later, the Commerce Department reported that new home sales rose 17.3% in June as new single-family home sales increased 17.2%.
An urban flight from cities to rural communities continues as well.
“Along with rising builder sentiment, we are seeing increasing consumer demand in the suburbs, exurbs and rural areas,” said NAHB Chief Economist Robert Dietz. “At the same time, builders are dealing with supply-side concerns such as rising material costs, particularly lumber, which surpassed its 2018 price peak this week. Nonetheless, low inventory levels point to construction gains ahead.”
Home prices continue to move upward as well, however.
The median sales price of new houses sold in June 2020 was $329,200, rising 6.1% from the revised May median sales price of $310,200. The average sales price for June was $384,700, up nearly 6.2% from a revised average price of $362,300 for the previous month.
Here’s how new home sales break down by region:
- Sales in the Northeast increased 81.9% above the May rate and have have risen 115.% from the June 2019 rate.
- In the Midwest, sales rose 10.5% while rising 33.3% from the June rate a year ago.
- The South saw sales grow 7.2% and but declined 1.8% compared to the June 2019 rate.
- In the West, sales climbed 18% from the May rate and 4.1% compared to the prior year.
Sales on a year-to-date basis are 0.2% higher in the South, 3.1% in the West, 12.6% in the Midwest, and 22% higher in the Northeast.
The latest New Monthly Residential Sales report from the Department of Commerce is available here.