The housing industry was bracing itself for a brutal April, but for new home builders, the damage was not nearly as bad as expected. Though new home sales were down from January, they stayed relatively flat compared to March despite challenging conditions due to the coronavirus. NAHB forecasted a sales decline in April, but now the relatively stable new home supply and number of sales point to the housing industry as a leading force in the nation’s economic recovery.
After weakening in March, the volume of new home sales came in much better than expected in April. Due to economic challenges associated with COVID-19, NAHB was forecasting an additional sales decline in April. However, new home sales estimates from the Census Bureau reveal relatively flat conditions compared to March.
The Census estimates reported a 623,000 seasonally adjusted annual rate in April, after a slightly revised 619,000 pace in March. The April rate is down approximately 20% from the peak rate in January. It is reasonable to expect a downward revision for the April data next month given persistent weakness in the labor market. Nonetheless, mortgage application data and anecdotal reporting from builders indicates that housing demand picked up in recent weeks.