Saturday, June 6, 2020 / by Teresa DiPeso
Sales of newly built homes surged in May, a new survey shows, the latest sign that the housing market is already recovering from a sharp drop in home sales due to the pandemic.
New home sales rose 21% in May from a year earlier, and the average sales rate per community rose 24% year-over-year, according to a survey of more than 300 U.S. builders conducted by John Burns Real Estate Consulting LLC.
The survey suggests those numbers should reflect a significant improvement over the preceding months, when home-shopping demand plunged in March and April as potential buyers stayed indoors and unemployment rose. Demand has started rising in recent weeks, real-estate brokers say, as stay-at-home restrictions ease and mortgage rates remain near record lows.
Mortgage applications for home purchases in the week ended May 29 also rose for the seventh straight week, up 5.3% from a week earlier and 17% from a year earlier, according to the Mortgage Bankers Association.
The spring is typically the most important season for home builders, as families want to buy houses and move in before the start of a new school year. Some of the recent buying represents springtime demand that was delayed by a month or two, said John Burns, CEO of John Burns Real Estate Consulting.
Other buyers who planned to buy homes in 2021 or later are moving up their timelines, Mr. Burns said. “People don’t want to be quarantined again in a place they don’t like,” he said, “so if you were thinking about buying, even next year, you’re like, ‘Let’s do it now.’”
New homes, which typically make up about 10% of the market, have benefited as homeowners have opted not to sell during the pandemic, reducing the supply of existing homes in many regions. The total inventory of homes for sale as of May 30 was about 20% lower than a year earlier, according to Realtor.comIf you are ready to purchase your new home, call us!
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