Sales of newly built, single-family homes fell 15.4 percent to a seasonally adjusted annual rate of 627,000 units in March, coming off a downward revision in February, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The March rate is 9.5 percent lower than the March 2019 pace.
“Despite the sharp decline in new home sales this month, the first quarter of 2020 was actually 6.7 percent higher than the same period last year, reflecting a strong pace prior to the virus outbreak,” said Dean Mon, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Shrewsbury, N.J. “While we expect to see some further impacts to the industry, we remain confident that housing will be a sector that will help lead the economic recovery.”
“The drop in March sales reflects buyer concerns over the virus, and was primarily concentrated in the hardest hit regions of the Northeast and West,” said NAHB Chief Economist Robert Dietz. “The weakening in sales is in line with our builder surveys that showed dramatic declines in buyer traffic and builder confidence in April. We expect further slowing of the pace of new home sales in April, as jobless claims continue to rise, before stabilizing later this year.”
A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the March reading of 627,000 units is the number of homes that would sell if this pace continued for the next 12 months.
Inventory rose to a 6.4 months’ supply, with 333,000 new single-family homes for sale, 1.2 percent lower than March 2019. Of that total, just 76,000 are completed, ready to occupy. The median sales price was $321,400. The median price of a new home sale a year earlier was $310,600.
Regionally, new home sales were down across all four regions: 41.5 percent lower in the Northeast, 8.1 percent down in the Midwest, 0.8 percent down in the South and 38.5 percent lower in the West.