Sales of new homes were going strong in 2020 until the coronavirus began disrupting economic activity in the country. As a result, sales of new-built single family homes fell by 15.4% in March compared to one year ago, to just 627,000 units, according to data released Thursday from the U.S. Census Bureau and Department of Housing and Urban Development.
“Despite the sharp decline in new-home sales [last] month, the first quarter of 2020 was actually 6.7% higher than the same period last year, reflecting a strong pace prior to the virus outbreak,” Dean Mon, chairman of the National Association of Home Builders, said in a statement. “While we expect to see some further impacts to the industry, we remain confident that housing will be a sector that will help lead the economic recovery.”
New home inventory increased over the same period to a 6.4 month supply in March. As of last month, there were 333,000 new single family homes listed for sale in the U.S., down 1.2% from a year ago. Of those, 76,000 are completed and ready to occupy, the NAHB said.
The median sales price for a new home in March was $321,400, up from $310,600 a year ago.
“Buyers still in the market for a home might take a fresh look at new homes in the months ahead, especially if new-home prices soften," realtor.com’s Chief Economist Danielle Hale said in a statement.
New-home sales dropped in all four regions of the U.S. last month. New-home sales saw the steepest drops in the Northeast, down 41.5%, followed by a 38.5% drop in the West, an 8.1% decrease in the Midwest, and a 0.8% decrease in the South.
“The drop in March sales reflects buyer concerns over the virus, and was primarily concentrated in the hardest-hit regions of the Northeast and West,” said NAHB Chief Economist Robert Dietz.
Existing-home sales saw a much smaller decline last month. The National Association of Realtors reported last week that sales of existing homes dropped 8.5% from February to March and were down just 0.8% over a year ago. Further, the median price for previously owned homes was up in March to $280,600—an 8% annual rise.