Charts: New Home Sales Pace Reaches 2006 Levels
Originally published by: NAHB — September 24, 2020
The following article was produced and published by the source linked to above, who is solely responsible for its content. SBC Magazine is publishing this story to raise awareness of information publicly available online and does not verify the accuracy of the author’s claims. As a consequence, SBC cannot vouch for the validity of any facts, claims or opinions made in the article.
New single-family home sales surged in August, as housing demand was supported by low interest rates, a renewed consumer focus on the importance of housing, and rising demand in lower-density markets like suburbs and exurbs.
Census and HUD estimated new home sales in August at a 1.01 million seasonally adjusted annual pace, an approximate 4.8% gain over revised July rate of 965,000 and is 43.2% above the August 2019 estimate of 706,000. This is the strongest seasonally adjusted annual rate since September 2006.
The gains for new home sales are consistent with the NAHB/Wells Fargo HMI, which soared to an all-time high of 83 in September, demonstrating that housing is the leading sector for the economy. Consider that despite high unemployment, new home sales are estimated to be 14.9% higher for the first eight months of 2020 compared to the first eight months of 2019.
Sales-adjusted inventory levels declined again, falling to a just a 3.3 months’ supply in August, the lowest in the history of the data series back to 1963. This factor points to additional construction gains ahead. The count of completed, ready-to-occupy new homes is just 54,000 homes nationwide. Total inventory declined almost 40% year-over-year, with inventory down to 282,000.
Moreover, sales are increasingly coming from homes that have not started construction, with that count up 69% year-over-year, not seasonally adjusted (NSA). In contrast, inventory of for-sale completed ready-to-occupy homes are down almost 33% year-over-year (NSA). These measures point to continued gains for single-family construction ahead.
Thus far in 2020, new home sales are higher in all regions. Sales on a year-to-date basis are 12% higher in the West, 14% in the South, 24% higher in the Midwest and the Northeast.