New Home Sales Reach Highest Level Since Great Recession
July 24, 2020
Sales of newly built, single-family homes rose to their highest level since the Great Recession, up 13.8 percent to a seasonally adjusted annual rate of 776,000 units in June, according to data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The June rate is 6.9 percent higher than the June 2019 pace.
"While Wall Street may have been expecting a smaller gain, anyone following the NAHB/Wells Fargo Housing Market Index would know these numbers are in line with what we are hearing from builders," says Chuck Fowke, chairman of the National Association of Home Builders. "Builders are moving to ramp up production to meet growing demand."
"Along with rising builder sentiment, we are seeing increasing consumer demand in the suburbs, exurbs and rural areas," says Robert Dietz, NAHB chief economist. "At the same time, builders are dealing with supply-side concerns such as rising material costs, particularly lumber, which surpassed its 2018 price peak this week. Nonetheless, low inventory levels point to construction gains ahead."
Inventory fell to a 4.7 months' supply, with 307,000 new single-family homes for sale, 7 percent lower than June 2019. The current months' supply is the lowest since 2016.