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Another Sign of the Times: New-Home Sales Take Deep Dive in March

Apr 27, 2020 by Marc Rapport

Sales of new single-family houses plummeted in March, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD).

The agencies announced Thursday, April 23, that new homes sold in March at an estimated adjusted annual rate of 627,000 units nationally, a 15.4% collapse from the revised estimated February rate of 741,000 and 9.5% below the March 2019 estimate of 693,000.

By region, the South accounted for a seasonally adjusted 385,000 of those estimated 627,000 sales of new single-family homes, followed by the West at 139,000, the Midwest at 79,000, and the Northeast, where New York City has become a global epicenter of the outbreak, at 24,000.

Sales prices slip from February

The median sales price for new homes was $321,400. The mean, or average, sales price was $375,300, the Census Bureau said. That compares with $310,600 median and $372,700 mean, in March 2019.

That's the year-ago look. While that might indicate a growing market, that's suddenly no longer the case.

A month ago, February 2020 figures from the same source were $330,100 and $387,200 for the median and average, respectively.

So, by that measure, overall sales prices for new homes dropped significantly in four short weeks. Similarly, many Realtors are reporting declining customer interest from their perspective.

The "starts" of things

The new-home sales report follows closely on the heels of the Census/HUD report that new home starts had fallen 22.3% to a seasonally adjusted rate of 1.22 million in March, the same month that U.S. joblessness soared to unprecedented numbers.

That's for both single- and multi-family home construction. Single-family starts fell 17.5% and multifamily starts fell 31.7% from February to March, according to census and HUD figures in that April 16 report.

Some of the metrics are holding firm. For instance, median months to sell a new home was 3.4 in March and February of this year and 3.6 in March 2020, the April 23 report showed.

There's also plenty of supply for those inclined to buy. There was a seasonally adjusted estimate of 333,000 units for sale at the end of March, good for 6.4 months at the current sales rate, the new report said.

More to come

The pandemic's effects on the housing market may just be getting started. The U.S. didn't have its first confirmed case until Jan. 22, and COVID-19 wasn't declared a pandemic by the World Health Organization until March 11.

The Census Bureau said the April report is scheduled to be released on May 26. You can view full text and tables of the bureau's reports here.

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