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The home building industry came into 2020 riding the wave of progress it made in the latter half of 2019, and new home sales hit a nearly 13-year high in January. Demand is up, builders are getting busy, and home prices are soaring. But as the industry comes down from the high of finally feeling relief after so many tough months, the chronic problems remain, and on the top of the list is the inventory shortage. Despite builders doubling down on projects—especially lower, entry-level homes—inventory is at the lowest level seen since 2013, and as we sit on a mere 3.5 month supply, we are nowhere near the end of the road to recovery.
The number of new home sales hit an almost 13-year high last month, according to data released by the U.S. Census Bureau this morning.
In total, new home sales were up 7.9% from December to January. There were 764,000 new, single-family units sold in the month—an 18.6% uptick over the year and a marked improvement over the Bureau’s predicted numbers of 711,000.
Sales were up particularly in the Midwest (30.5%) and West (23.5%). They actually declined by 4.4% in the South.
According to Matthew Speakman, an economist for Zillow, the new data is just another sign of a strong housing market in 2020.
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