New home sales in June towered over the previous month’s numbers, with a 14% gain compared to May. The estimated new home sales last month were at a 776,000 seasonally adjusted annual pace, according to NAHB, showing the strongest rate since the Great Recession. Demand for new homes were leveraged by low interest rates and consumers' newly found focus on the importance of housing. There was not only a monthly gain, but new home sales in the first half of 2020 are estimated to be 3.2% higher than the first half of 2019.
The gains for new home sales are consistent with the NAHB/Wells Fargo HMI, which returned to pre-recession highs and demonstrates that housing will be a leading sector in an emerging economic recovery. Consider that despite double-digit unemployment, new home sales are estimated to be 3.2% higher through for the first half of 2020, compared to the first half of 2019.
Moreover, pricing firmed in June, with median new home price expanding to $329,200. However, headwinds remain, including elevated unemployment and surging lumber prices, which exceeded their 2018 peak this week.