Photo: James Bombales
It’s not just the resale market that’s experiencing astronomical annual growth. Last month, new single-family home sales jumped 36.3 percent year-over-year at a seasonally adjusted annual rate of 901,000 units, according to the US Census Bureau. Activity for a single month hasn’t been this high since 2006, prior to the 2008 housing crisis.
July’s sales totals outperformed June’s by 13.9 percent or a difference of 110,000 transactions. The median-priced single-family home sold for $330,600 last month, up 7.2 percent over the same period last year.
“Low mortgage rates, pent-up demand, and what appears to be an increase in homebuyers moving to suburban areas in at least some metro areas is fueling a V-shaped housing recovery,” said Doug Duncan, Chief Economist at Fannie Mae, in a statement.
The demand for newly-built homes continued to outstrip supply in July. There were 4.0 months of supply for new homes for sale, the lowest level recorded in 16 years. That being said, pressure from would-be buyers is likely to boost housing starts over the next few months.
Last week, the Census Bureau released its monthly report on new residential construction for July 2020, which showed a 22.6 percent increase in housing starts at an annualized rate of 1.496 million units.
“While we expect new home sales and construction to continue to be a bright spot as the economy expands, we still expect the pace of sales to cool somewhat in coming months,” added Duncan.
“We believe that pent-up demand is likely diminishing, as year-to-date sales are now up 8.4 percent from the same period in 2019.”
It was a red-hot summer for new home sales, but it remains to be seen what the fall months will ultimately bring.