In a sign that the housing market continues to lead the economy during the coronavirus outbreak, sales of newly built, single-family homes rose in July to its highest pace since 2006. Sales increased 13.9% to a seasonally adjusted annual rate of 901,000 units, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The July rate is 36.3% higher than the July 2019 pace. New home sales are up 8% on a year-to-date basis.
“This is exactly what NAHB’s builder confidence survey has been indicating in recent months. Consumers are being driven by low interest rates, a growing focus on the importance of housing and a shift in buyers seeking homes in lower density areas,” said NAHB Chairman Chuck Fowke, a custom home builder from Tampa, Fla. “Despite these positive conditions, affordability challenges remain especially as builders are dealing with building cost increases, including a dramatic rise in lumber costs in recent months.”
“New home sales are benefitting from the suburban shift, as prospective buyers seek out affordable markets in order to obtain more residential space. Moreover, sales are increasingly coming from homes that have not started construction, with that count up 34% year-over-year,” said NAHB Chief Economist Robert Dietz. “In contrast, sales of completed, ready-to-occupy homes are down almost 24%. These measures point to continued gains for single-family construction ahead.”