June New Home Sales: Remarkably Resilient

• June new home sales were up 13.8% from May and 6.9% from June 2019, to 776,000 (SAAR), according to the U.S. Census Bureau.
• The median sales price of new houses sold in June 2020 was $329,200, up 6.1% from May and 5.6% from a year ago.
• Inventory of new homes available for sale in June fell 14.5% from May and 14.5% year-over-year.

Continuing the incredibly strong pace of monthly gains that began in May, sales of new homes have now recovered all losses realized in the pandemic and, somehow, sit at their highest levels in nearly 13 years – just before the Great Recession. More new homes have sold through June of this year than in any year since 2007, even as an unprecedented pandemic continues to put large portions of the economy on hold. The combination of low mortgage rates, a shortage of for-sale existing homes, and perhaps an increased preference for new, never lived-in homes continues to keep home shoppers motivated. The housing market has been remarkably resilient to the economic damage inflicted by the pandemic to this point, and in normal times, an improvement in new home sales would be a sign of more good things to come. That may well prove to be true in this case, but of course these are not ordinary times, and significant risks have emerged in just the last few weeks. The accelerated spread of the coronavirus across the country and expiration of key relief programs are two factors that will put the housing market's resilience to the test and could threaten the recent improvement in home sales. While the strong numbers today are a good indicator for the market at the moment, the coming weeks will be key.

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