The Meyers Research New Home Pending Sales Index, released Tuesday, came in at 82.1 for March, representing a 23.9% decrease from March 2019. On a month-over-month basis, new home sales fell by 33.1% between February and March 2020.
Pending new homes sales posted a drop on a year-over-year and month-over-month basis for all of the select markets. Given the reversal in trend mid-spring selling season, looking at the month-over-month change is more valuable today.
- Houston, San Francisco, and Los Angeles posted the largest drops month-over-month in pending new home sales.
- The trend in Houston is unsurprising as the local housing market deals with the one-two punch of COVID-19 and a battered energy sector.
- Unease around shelter-in-place orders as well as confusion about what activities could continue contributed to the larger than average drops in San Francisco and Los Angeles.
“March is historically a better month than February for new home sales, but COVID-19 turned that trend on its head, in part because of record-breaking job losses, ” said Ali Wolf, chief economist at Meyers. “Uncertainty and fear are powerful forces.”
“The housing market is dependent on the labor market, and today, the number of Americans that are furloughed or permanently laid off are at record levels,” said Wolf. “Even still, we are finding builders are pleasantly surprised to learn that homes sales are still happening, just at a far slower pace.”
