New-Home Sales Bolstered by Renters Escaping Dense, Urban Apartments
Late March and early April were brutal for home sales as they fell 85 percent below the same time last year by early, according to John Burns Real Estate Consulting. But now home builders are seeing a bump up in activity as that number shrinks to 65 percent below last year. It’s still not the glowing numbers expected for the spring season, but it is the hope builders needed. Homebuyers are slowly dipping their feet back into the housing market, but the first ones to return are not necessarily who you would expect. Builders have seen an increase in young renters looking to for a home of their own as the dense, urban locations that Millennials once loved are starting to feel like petri dishes.
Home sales nearly ground to a halt at the end of March, as the coronavirus pandemic forced an economic shutdown that scuttled open houses and shattered consumer confidence. Now, demand appears to be coming back, especially for newly built homes.
In the initial four weeks of the national shutdown, sales of newly built homes began falling precipitously, down 85% from normal spring activity by the fourth week. In the past two weeks, however, the numbers have started to climb, according to John Burns Real Estate Consulting, which tracks hundreds of builders nationwide.
“We’re still down roughly 65%, but more positive news is coming out of the new home market, particularly for builders who are targeting the first time and entry level buyers,” said Devyn Bachman, manager of research at JBRC. She noted that a wave of renters are leaving their apartments and eyeing new homes.