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04-23-20 | Economic News

COVID-19 Measures Reduce New Home Sales in March

Northeast and West Hardest Hit but Year-Over-Year Still Ahead

Falling largely in line with expectations, sales of new residences dropped 15.4% last month.

New home sales, to little surprise, dropped quite a bit as shutdowns to contain COVID-19 took hold across the nation. Overall sales fell 15.4% and February's sales were slightly less robust than reported, being revised 24,000 units lower. That being said, sales through March are running 6.7% ahead of their year-ago pace since mild weather, strong job growth and maybe an inkling of the forthcoming crisis got 2020 off to a strong start.

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March's fall in new home sales was the largest in six years. The Northeast's month-to-month loss was 41.5% and the West was close behind at -38.5%. In both of those regions, stay-at-home orders were issued earlier than in the Midwest and South. An even bigger national decline is being predicted for April.

Home mortgage applications rose slightly in mid-April but are down 31% year-over-year. The Wells Fargo Economics Group states that "the decline suggests that sales will not crater like airline travel and restaurant sales did. Sales should also bounce back more quickly this summer," though "homebuilders are going to miss the bulk of the key selling season."

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