New Home Sales Decrease to 627,000 Annual Rate in March

New home sales fell 15.4% from February and 9.5% from a year ago, to 627,000 (SAAR), according to the U.S. Census Bureau.

New home sales fell 15.4% from February and 9.5% from a year ago, to 627,000 (SAAR), according to the U.S. Census Bureau.
The median sales price of new homes sold in March 2020 was $321,400.
Inventory of new homes increased in March to 6.4 months from 5.2 months in February. This is slightly above the normal range (less than 6 months supply is normal). The all time record was 12.1 months of supply in January 2009.

Non-Seasonally Adjusted Sales figures in March, show 61 thousand new homes were sold. Last year, 68 thousand homes were sold in March. The all time high for March was 127 thousand in 2005, and the all time low for March was 28 thousand in 2011.

The sales in March were only partially impacted by COVID-19 crisis. Sales in April will probably be much lower.

Striking regional differences are also important to watch — sales in the South, which generally accounts for the lion’s share of new home sales, were down only modestly. But sales in the West and Northeast, regions hit earlier by the coronavirus outbreak and among the first to impose strict social distancing measures, fell dramatically. With widespread shutdowns spreading to the South and other regions toward the end of March, that likely sets the market up for an even worse April. It’s a particularly disappointing turn for the new construction industry, which was in the midst of a stellar stretch that began in the summer of 2019 and continued into early 2020. Builders finally seemed to be gaining steam and were working hard to bring new supply to an inventory-starved market, and buyers were quickly snapping up the new homes being erected. Now, with sales waning, construction projects getting shelved and homebuilders’ confidence plummeting alongside consumers’, the once-hot market for new homes has been put into a deep freeze this spring.