Strong May Sales For New Construction Homes

A recent cnbc publication reports a considerable increase in demand for new construction homes in May.   After COVID-19 brought our economy close to a still stand beginning of March 2020, homebuilders are now seeing a 13% sales increase for single-family homes, according to US Census.  This is the strongest sales report for May since 2007 and builders are struggling to meet the demand as construction starts were not as strong. “Due to labor and land constraints, homebuilders were already producing too few single-family homes given potential demand. As housing demand has picked up in recent weeks, builders have shifted sales to homes not yet under construction – a 20% year-over-year gain for such sales.” – said Robert Dietz, Chief Economist, National Association of Home Builders.

As sales of new single-family homes have increased by 13%, the construction begin of hew homes was nearly 18% lower compared to last year.  Builders did not anticipate such a quick recovery for housing demand as COVID-19 has already increased home buyers’ interest in suburban homes favoring new over existing construction.  “The rapid improvement in sales of new homes may also reflect a change in consumer preferences, with buyers showing a newfound penchant for cleaner, never-lived-in homes — although the long-term durability of that trend remains to be seen,” – said Matthew Speakman, Economist, Zillow.