The U.S. Census Bureau revealed that new-home sales in March 2020 fell 15.4% from February and 9.5% annually.
An estimated 627,000 new-home sales occurred in March compared to 741,000 in February.
"Before the coronavirus pandemic, new home sales had been ramping up to their highest levels since 2007,” said Holden Lewis, Home and Mortgage Specialist, NerdWallet. “But new home sales fell considerably in March, and are likely to continue to decline. Even though homebuilder confidence has fallen, don’t expect builders to offer big discounts anytime soon. Buyers eventually will return, and in huge numbers.”
Danielle Hale, Chief Economist, for realtor.com, said while new-home sales face the same buyer headwinds as existing-home sales, the longer lead time for new-home listings means inventory won’t evaporate as quickly.
“Already, the 5 months supply of new homes in February was larger than the 3 months supply of existing homes, and COVID-19 may widen that gap. New homes for sale were down just 1.2 percent compared to last March, but with the slower pace of sales, months’ supply rose to 6.4 months compared with 3.4 months for existing homes,” Hale said.
She also said the home buyers still in the market for a home might “take a fresh look” at new homes in the months ahead, especially if home prices fall.
The median sales price of new houses in March was $321,400 and the average sales price was $375,300.
Every region posted a month-over-month decline, with new-home sales in the Northeast falling 41.5% from February.
The report also revealed that the number of homes priced between $200,000 and $299,000 grew month-over-month from 19% to 22%. The share of homes sold prices between $300,000 and $399,00 fell from 18% to 15%.
Despite the monthly decline, overall sales increased annually by 0.8% in March—marking the ninth straight month of gains.