- New home sales fell -4.4% in February, the second steepest decline in 4 years from January’s record high of new home sales
- Despite this -4.4% decline, February’s new home sales total was +18.6% ahead of February new home sales in 2019
The number of new home sales in February 2020 dropped -4.4% from January’s record high total. Despite this drop, the seasonally adjusted annual rate of 765,000 new home sales in February was +18.6% higher than one year ago.
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New home sales inventory in February represented a supply of 5 months, an improvement over January’s supply of 4.8 months, a three-year low. Wells Fargo economists were fairly optimistic about this tight inventory indicating in a recent report, “Inventories of new homes remain exceptionally lean, particularly for completed homes. Persistently low inventories (in light of the coronavirus)…are one reason we believe any downturn in the homebuilding industry will be relatively short.”
Before the outbreak and spread of COVID-19, the housing market was showing positive momentum. Interest rates were at rock-bottom lows, the job market was strong, new and existing home sales were on the plus side and homebuilders were ramping up production, despite supply and affordability challenges for buyers.
Mathew Speakman, an economist with Zillow, said, “…by most measures, the housing market looked to be in a good place and primed for a solid spring selling season – a season that has since been put on indefinite hold.”
Speakman used two phrases to describe the present housing market and economy – pre-coronavirus and post-coronavirus – phrases that are already being or will likely be coined by housing professionals and economists. Speakman added, The months ahead will almost certainly be a difficult stretch for the industry, but the promise of better times to come on the other side may yet be enough to keep thins afloat.”
Thanks to HousingWire’s Alcynna Lloyd.