New single-family home sales surged 13.8 percent to a seasonally adjusted rate of 776,000 in June, surpassing analyst expectations and notching the strongest rate since 2007, according to data released Friday by the U.S. Census Bureau and the Department of Housing and Urban Development.
Sales were up from 682,000 in May and 726,000 in 2019, 6.9 percent above the numbers from last year. The surge was likely caused by pent-up demand for homebuying that came after the pandemic-related halts on real estate that occurred throughout the country in March, April and May.
The surge was the strongest in 13 years, according to the Mortgage Bankers Association.
Influenced by both low mortgage rates and low inventory on the market, many homebuyers chose to buy new properties rather than existing ones.
“The 776,000 unit sales pace for June was the strongest since July 2007, and is an increase of almost 14 percent nationally over the month,” Joel Kan’s, AVP of Economic and Industry Forecasting for the Mortgage Bankers Association, said. “Sales were up 7 percent year-over-year, and all regions except for the South were back to a sales pace higher than a year ago. Data from MBA’s Builder Applications Survey released earlier this month showed a similar increase in the demand for new home purchases.”
The median sales price of all new single-family homes was $329,200 while the average sales price was $384,700. There were also 307,000 new homes for sale on the market — a supply of 4.7 months at the current sales rate.
While it is unclear how rising COVID-19 rates will affect the market in coming months and the long-term, the summer’s outlook indicates a rush to buy after a stilted spring season.
“New home sales keep roaring along, spurred by pent-up demand,” Holden Lewis, home and mortgage specialist at NerdWallet, said in a press statement. “Not enough existing homes are up for sale, so shoppers are buying new homes.”