Sales of new single-family homes popped in July, climbing 36.3 percent year over year and 13.9 percent month over month, according to data released jointly Tuesday by the U.S. Census Bureau and the Department of Housing and Urban Development.
The median sales prices of the new homes sold in July clocked in at $330,600 while inventory represented 4 months of supply at the current sales pace.
“This new home sales data completes a blockbuster month for the American housing market,” John Pataky, executive vice president at TIAA Bank, said in a statement. “Keen buying interest and tightening supply have ensured that the housing market has rebounded stronger than any other sector of the economy.”
“That this comes despite continued stay-at-home measures brought on by the pandemic indicates that buyers are undeterred from seeking more space, especially as they continue to work from home,” Pataky added. “However, not enough homes are being built to keep up with demand.”
Meanwhile, Redfin also released its own data that showed sales of newly-built homes passed pre-pandemic levels in July, climbing 10.1 percent year over year according to a new survey from Redfin. For comparison, sales of existing homes rose just 5.3 percent year over year in the same month, according to Redfin.
The supply of new-construction homes saw its biggest collapse since Redfin began recording the data in 2013, falling 28.4 percent year over year in July.
“The shortage of both new and existing homes is intensifying across America right now as record-low mortgage rates drive more demand, but the shortage of new homes is less severe due to a surge in construction right before the pandemic,” Redfin senior economist Sheharyar Bokhari, said in a statement.
“As a result, sales of new homes are growing faster than sales of existing homes,” Bokhari added. “Sales of new homes are also on the rise because the coronavirus pandemic is fueling interest in the suburbs — where there tends to be more space to build new homes.”
Newly built homes now make up one of every five homes for sale, which is the largest share on record, according to Redfin.
That number may continue to grow as residential construction projects in the U.S. grew 23.4 percent year over year in July and construction projects authorized by permit increased 9.4 percent, surpassing pre-pandemic levels.
There is some uncertainty, however, as homebuilders are facing a lumber shortage, which could dampen construction. Lumber prices are up more than 100 percent since mid-April amid reduced production due to the pandemic and tariffs on lumber imports.
