Key Highlights
- New home sales jumped +10.1% compared to July 2019, according to Redfin
- Existing home sales increased +5.3% in July
- Buyers have shifted their sights to new home developments
New home sales overtook existing home sales in July, according to Redfin.
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New home sales increased +10.1% compared to July 2019 while existing home sales bumped up to +5.3%. This makes continued logistical sense as existing homeowners continued to be reluctant to sell while the economy remains uncertain.
Despite there being -28% less new construction inventory this July than there was in July 2019, there was substantially less existing inventory, -37% less inventory, this July compared to last July. Redfin senior economist Sheharyar Bokhari said, “The shortage of new homes is less severe due to a surge in construction right before the pandemic.”
Also, according to Bokhari, “The coronavirus pandemic is fueling interest in the suburbs – where there tends to be more space to build new homes.” Secondary markets such as Baton Rouge LA and Worcester MA are beneficiaries of this interest in suburbs…home sales have soared +50% and nearly +72% respectively.
The July new home median sale price was $375,000 compared with the existing home median sale price of $308,000. This median price point of $375,000 represents a +2.3% y/y increase whereas the existing home median sale price of $308,000 represents a soaring increase of +9% amid nearly non-existent inventory. New construction in West Palm Beach FL saw a soaring +40% increase in median home price while Los Angeles experienced a median sale price jump of +28.3% in July.
Additionally, new home construction jumped +23% in July compared to last year while building permits increased +9.4% from July 2019.
Thanks to Mansion Global and Redfin.
Also read: Population Growth in the South and West Driving Up New Home Sales & Prices, Zillow Now Partnering with Homebuilder D.R. Horton, New Home Construction Up +17.3% in June
