The article in the link discuss New Home Sales Proving Wall Street Was Wrong. According to the article, Wall Street analysts had expected sales of new homes to drop in March of 2020 due to the uncertainty of the Covid-19 pandemic. However, surprise data released by the U.S. Department of Commerce reveals that new home sales actually increased by more than 7% in March.
This unexpected increase in sales is due to several key factors. First and foremost, mortgage rates had been dropping steadily since late March, and the median new home price was 8% lower than the previous month. This helped attract buyers to take advantage of the lower prices and attractive mortgages, resulting in a surge in sales.
Additionally, builders had ramped up production in the weeks prior to the pandemic, meaning that they had a wide variety of homes that were prepared ready for sale. In fact, the Survey of Construction reported starts up 3.1% in February, with March’s activity looking to bring even stronger numbers.
The increase in new home sales is an encouraging sign for the U.S. economy, as it shows that the housing industry is continuing to move forward despite the uncertain economic effects of the pandemic. This could translate to higher confidence among buyers and builders, resulting in more construction and higher home sales figures in the coming months. Overall, the unexpected increase in new home sales is a positive sign and may indicate that the housing market is more resilient in the face of a potential recession.
You can read this full article at: https://www.housingwire.com/articles/new-home-sales-proving-wall-street-was-wrong/(subscription required)
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