Analysts expected new home sales to increase just under 2% last month. They missed the mark by a mile. Instead, sales jumped 16.6%. Granted, part of that was due to the fact that the April numbers were revised lower by 10%.
But the real proof is in the year-over-year numbers.
Compared with last May, which was obviously pre-pandemic and seems like a lifetime ago, new home sales were up 12.7%. There’s no knocking that number.
New home sales represent only about 10% of all home sales, which is probably why the numbers look so good. There aren’t many existing homes on the market, and it’s hard to get in to see them during the pandemic. Which leaves homebuyers, anxious to get out of large cities and take advantage of rock-bottom interest rates, virtually touring new homes. Many homes sold without the buyers ever stepping foot on property.
The trend might not last if we get another wave of the virus, but at least it’s a bit of good news for now.