The New Home Pending Sales Index grew 0.8% month-over-month and 45.8% year-over-year as consumers looked past the election and economic uncertainty and focused on what has become extra important this year: home.
New Home Pending Sales Index for select markets
Housing is the strongest sector in the entire economy, and today’s growth is felt across the country.
The best new home markets in October were again Raleigh, Denver, and Jacksonville. Builders in these markets have been busy with both contract sales and pulling new permits.
The persistently strong contract sales are pulling down inventory. Community count nationwide is off 15% year-over-year, led by markets like Seattle, Washington, DC, and Denver.
Pending new home sales trended above October 2019 levels in nearly every top U.S. market.
As COVID-19 hospitalizations rise and parts of the country start shutting down again, housing plays an even greater role in our life. Looking into 2021, however, some builders are expressing caution over the sustainability of the current growth rates due to limited inventory and some affordability concerns.
Ali Wolf, Chief Economist at Zonda Economics
The Zonda 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. Zonda monitors 18,000 active communities in the country and the homes tracked can be in any stage of construction. The new home market represents roughly 10% of all transactions, allowing little movements in supply to cause outsized swings in market activity. As a result, the New Home PSI blends the cumulative sales of activity 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 foundation of the index is a monthly survey conducted by Zonda. It is necessary to monitor both new and existing home sales to establish an accurate picture of the relative health of the residential real estate market.
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 Zonda.