Pending New Home Sales Hit an Index High in June
Meyers Research's New Home PSI came in at 132.2 for June, representing an 18.2 percent increase from June 2019. On a month-over-month basis, new home sales rose by 17.5 percent from May.
"When life as we knew it got turned upside down, our homes became the only constant," says Ali Wolf, chief economist at Meyers Research. "The shift toward at-home work, school and hobbies, however, resulted in a rethink of our space that propelled new home sales to the highest level since 2007."
Pending new home sales continued to show major locational differences, but all of the select 20 markets in the country posted month-over-month gains and nearly all trended above June 2019 as well.
The best new home markets in June were Raleigh, Cincinnati and Tampa. Raleigh and Tampa had strong housing markets pre-COVID-19 and after a brief pause, buyers are back in full force. Lifestyle and positive net migration are two big contributors to the success for these housing markets today.
"There is no doubt that sub-3.0 percent mortgage rates have played a big role in the rapid rebound of the housing market," says Wolf. "There aren't many more compelling reasons to buy a home than virtually free money."
Philadelphia, Los Angeles, and New York all posted substantial month-over-month increases but are still down compared to last year. In these markets, the relative underperformance is partly due to a lack of inventory.