Worries are warranted with the dramatic slowdown in March because of the pandemic. The U.S. economy was basically shut down late winter and all spring of this year. Builders, realtors, lenders and homeowners alike were surprised that newly built homes jumped to almost 13% annually according to the U.S. Census. This is the strongest May pace since 2007 before the economy crashed in 2008.
“As housing demand has picked up in recent weeks, builders have shifted sales to homes not yet under construction – a 20% year-over-year gain for such sales,” said Robert Dietz, chief economist at the National Association of Home Builders.
In May homebuilders added 226,000 workers alone to meet the demand for new housing. The housing industry is making a quick recovery after the stay-at-home orders were lifted from Covid-19. Covid-19 has opened many potential homebuyers’ eyes to purchasing a new home that is not yet lived in and purchasing in the suburbs away from the inner city turmoil the pandemic caused and could potentially cause again in the future.
“The rapid improvement in sales of new homes may also reflect a change in consumer preferences, with buyers showing a newfound penchant for cleaner, never-lived-in homes — although the long-term durability of that trend remains to be seen,” said Matthew Speakman, an economist at Zillow.
CEO of Lennar, Stuart Miller believes that the shelter-supply-constrain that Covid-19 has produced will inturn allow all forms of shelter to thrive in the housing market and will be sustainable for the next couple of years to come.
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