New Home PSI: New home sales defy gravity: Up 39.6% year-over-year
Sep 22, 2020
August new home sales showed no signs of faltering. The New Home Pending Sales Index grew 3.0% month-over-month and 39.6% year-over-year. In April and May, the strength of the housing market varied wildly depending on geography. Today, nearly every market across the country is enjoying robust new home sales.
New Home Pending Sales Index For Select Markets
Pending new home sales trended above August 2019 levels in nearly every top market across the country.
The best new home markets in August were Austin, Raleigh, and Tampa. The housing success in these markets is driven by rapidly improving economies, positive net migration, and a large Millennial share of the total population.
Jacksonville and Denver round out the top five markets for August, with sales growth up 50%+ year-over-year. Builders are reporting strong sales across all different price points and life stages.
Activity in New York is still down year-over-year but has posted a month-over-month increase for the fourth consecutive month. While the market is down, builders offering product in the suburbs below the local FHA loan limit are selling homes at exceptional rates.
“Builders expected 2020 to be a good year for housing, but not even the most brilliant of forecasters could have predicted sales in August to be up over 50% year-over-year in some markets."
The Meyers Research New Home Pending Sales Index (PSI) is built on proprietary, industry-leading data that covers 60% of the production new home market across the United States. Reported number of new home pending contracts are gathered and analyzed each month. Released on the 15th business day of each month, the New Home PSI is a leading indicator of housing demand compared to closings because it is based on the number of signed contracts at a new home community. Meyers Research monitors 18,000 active communities in the country and the homes tracked can be in any stage of construction.
The New Home PSI is susceptible to outsized swings in contract activity based on shifts in the number of actively selling communities. As a result, Meyers Research normalizes the data to ensure consistency across the index. The New Home PSI blends the cumulative sales of active or recently sold-out projects with the average sales rate per community, which adjusts for fluctuations in supply. Furthermore, the New Home PSI is seasonally adjusted based on each markets’ specific seasonality, removes outliers, and uses June 2016 as the base month.
The data provided in this release are for use only by the primary recipient or the primary recipient’s publication or broadcast. This data may not be modified, resold, republished or licensed to any other source, including publications and sources owned by the primary recipient’s parent company without prior written permission from Meyers Research.