The U.S. Census Bureau and the Department of Housing and Urban Development have announced that March sales of new single-family homes fell 15.4% month over month — the largest drop since July 2013.
The decrease brought national new-home sales to a seasonally adjusted annual pace of 627,000. In addition to the stark monthly loss, that figure also represents a decline of 9.5% from the March 2019 estimate of 693,000.
New-home sales numbers also failed to reach economist expectations, with a Reuters poll forecasting sales at a rate of 645,000 units. The median new-home sales fell as well, dropping from $330,100 in February to $321,400 in March.
The average price fell monthly from $387,200 to $375,300.
The seasonally‐adjusted estimate of new homes for sale at the end of March was 333,000 — a supply of 6.4 months at the current sales rate.
Unfortunately, the new-home sales report may prove to be a better bellwether of coronavirus impact that the slightly-less-bleak existing-home sales numbers released earlier this week. New-home sales figures reflect more recent buyer behaviors because the numbers are based on contract signings, a relatively early part of the homebuying process. Existing-home sales data, on the other hand, reflects deals agreed upon much earlier in the year.
Also particularly telling is the geographic data released by the Census Bureau. Sales in the West and Northeast, areas impacted earlier and harder when the pandemic hit the U.S., fell considerably. The West saw a monthly fall of 38.5% and a yearly drop of 30.8%, while the Northeast posted monthly and yearly decreases of 41.5% and 4.0%, respectively. Clearly, early shelter-in-place measures and prospective buyer caution played a part in holding back sales in those two regions.
Compare those sales figures to the ones posted in the South, where sales retreated just 0.8% monthly and actually grew 1.3% from last March. Time will tell if social distancing measures, which began being mandated by Southern states as March wore on, will have a similar impact on the region’s sales figures.
Still, if you’re looking for a silver lining, March’s new-home sales numbers weren’t without a sign of hope: Despite the decreases, sales through March remain 6.7% ahead of their pace last year.