New Home Sales Dip; Still Strong
New single-family home sales are on the decline; however, new data from the Census Bureau and Department of Housing and Urban Development does not include the recent impacts of the coronavirus. The joint announcement states February's seasonally adjusted rate is 765,000, down 4.4% from January, but 14.3% ahead of February 2019.
Economists predicted a 2% decline in sales, and "… [sales] could decline further because of the coronavirus pandemic, which is boosting unemployment and severely disrupting economic activity," according to Reuters
Despite the slight drop-off from January, this was the strongest February showing since 2006 and the second-best month overall since the start of 2008. Sales in the Northeast and South increased while the Midwest and West saw declines. The median and average sales prices also increased in February.
"The pace of new home sales will decline during the second quarter due to the impacts of higher unemployment and shutdown effects of parts of the economy, including elements of the real estate sector in certain markets," said Robert Dietz, Ph.D., chief economist with the National Association of Home Builders, in a release. "However, given the momentum housing construction held at the start of 2020, the housing industry will certainly be a sector leading the economy in the eventual recovery.
-Michael Miller, managing editor