In a validation of the health of the new home market, Taylor Morrison, the fifth largest homebuilder in the U.S., reported a record monthly gain in June in orders for new home construction, up 94% year-over-year.
The builder also reported record sales in 22 housing markets across 11 states.
“To experience our best sales month in company history amid a pandemic, amid transitioning our business to a virtual environment seemingly overnight, and amid the economic and psychological impact on consumers, speaks volumes to not only Taylor Morrison’s resiliency but our customers’ resiliency, too,” said Sheryl Palmer, chair and CEO of the company, in an interview with CNBC.
Taylor Morrison, which is based in Arizone, said almost all of its sales offices have reopened since the pandemic-related shutdown. However, the company has increasingly relied on virtual tours of its new homes to cater to customers who’re still worried about the coronavirus, so they can shop from a distance.
Palmer told CNBC the new online tools enable customers to do in-person, self-guided tours too. The company has also created a virtual appointment system that lets shoppers progress through the home buying process virtually. The technology has “forever changed the way we do business,” Palmer told CNBC.
One reason for the rise in demand for new homes might be the current low mortgage rates, and a shortage of existing homes, Palmer said. In addition, her company carried out a survey of buyers in May and found that their number one desire these days is better home technology that helps to enable remote work and schooling. After that, the second and third most sought after desires were the need for more space, and additional rooms in the home, most notably a home office.
Nationally, sales of new homes fell in March as the COVID-19 pandemic raged. But by May, new-home sales had rebounded 13% annually, Census Bureau data shows. Home buyers are showing patience and a desire to build homes from the ground up: Builders report the biggest increase in sales among homes that have not yet been started.