While many American businesses are struggling during the COVID-19 pandemic, one industry that continues to grow is the homebuilding industry. According to the National Association of Homebuilders (“NAHB”), new home sales have reached their highest levels since the Great Recession. Sales of new homes built and sold are up 13.8% in June 2020, with a seasonally adjusted annual rate of 776,000 units sold in June alone nationwide. See US Department of Housing & Urban Development and the US Census Bureau. This is a 6.9% increase from the June 2019 pace. In the NAHB’s “Eye on Housing” index, new home sales are estimated to be 3.2% higher through the first half of 2020 as compared to 2019, with the median new home price expanding to $329,000.
“Along with rising builder sentiment, we are seeing increasing consumer demand in the suburbs, exurbs and rural areas,” said NAHB Chief Economist Robert Dietz. “At the same time, builders are dealing with supply-side concerns such as rising material costs, particularly lumber, which surpassed its 2018 price peak this week. Nonetheless, low inventory levels point to construction gains ahead.”
Moreover, according to the NAHB’s Housing Trends Report, the number of Americans who are considering purchasing a home within the next 12 months was 11% in the 2nd Quarter of 2020, which is essentially identical to that of 2019. This is in spite of the COVID-19 pandemic. First time homebuyers are around 59% of this figure, which is up 1% as compared to June 2019.
Even in the face of an uncertainty in the economy and the COVID-19 pandemic, home purchases and new hone sales have stayed consistent compared to one year ago. . With more and more people working from home and telecommuting, home ownership continues to be an important economic consideration for many Americans.