Housing Figures: New Home Sales Are Up, Confidence High

July 7, 2020

Housing Figures: New Home Sales Are Up, Confidence High

Housing Figures is our monthly round-up of the top news stories related to residential new construction spending and the latest market numbers.  

We’re more than excited to see how new home sales performed in May, leading to a June rebound in home builder sentiment and confidence. In additional good news, pending home sales surged in May, another sign housing could help lead the recovery.  

New home sales rose nearly 17 percent in May. Sales of new homes rose 16.6 percent in May, with sales of new single-family homes rising to a seasonally adjusted annual rate of 676,000 units. That report comes after another one which indicated existing homes dipped 9.7 percent in May, which represents the slowest pace in almost a decade. [Associated Press] 

Pending home sales surged in May. Pending home sales posted their biggest gain on record, growing 44 percent in May. The report from the National Association of Realtors indicates homebuyers came out of the woodwork as lockdowns started to ease in May. NAR’s chief economist Lawrence Yun also believes all signs point to the housing sector leading the way for economic recovery. [HousingWire] 

Builder sentiment rebounded in June. Home builder sentiment, measured by the National Association of Home Builders/Wells Fargo Housing Market Index, recovered from its April plungegrowing 21 points in June. June’s HMI was 58, with any reading above 50 indicating a positive market. [CNBC] 

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Residential construction spending is down four percent. The Census Bureau released their latest spending data, finding that residential construction spending was down four percent from April’s revised rate of $558.3 billion. May’s residential construction spending amounted to a seasonally adjusted annual rate of $535.9 billion. The numbers are slightly up, however, from May 2019’s numbers. [Census Bureau] 

Single-family permits grew in May. Single-family permits grew 11.9 percent in May, while single-family starts held steady at 0.1 percent growth. That’s a seasonally adjusted annual rate of 675,000 units. Overall housing starts, including multifamily, grew 4.3 percent to an adjusted rate of 974,000. Alone, multifamily starts grew 15 percent. [NAHB Now] 

Less home builders are cutting prices. According to the June HMI survey, only 15 percent of builders cut prices on their homes to encourage homebuyers sales in May. That number shrank from 22 percent in April. Alternately, 49 percent of home builders cut prices in March 2008 during the last housing recession. [NAHB Now] 

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