The housing market is so intense these days that new homes are rapidly being bought up before a shovel even hits the ground, according to a new report.
More single-family houses sold before starting construction in March than any month since 2006 at the peak of the housing bubble, according to Census Bureau data released in its monthly report on new housing sales. And by the end of the month, there were just 37,000 newly constructed houses for sale, the smallest number since 2013. Overall, sales of new houses were up 20.7% to a seasonally-adjusted annual rate just over 1 million, more than bouncing back from a weather-induced sales slump in February, and marking the fastest sales rate since 2006.
The gangbusters new home sales contrast with the declining sales of existing homes in March, attributed to a severely depleted supply rather than any lack of willing buyers. Homebuilders have been trying to meet the demand, starting house construction at the fastest pace since 2006 according to data out this month. Work-from-home trends begun during the pandemic, as well as millennials continuing to enter the housing market, will likely continue to boost demand for new single-family houses, economists at FT Advisors said in an email.
“As more homes become available, we expect demand will remain strong and help maintain a rapid pace of sales in 2021,” the FT economists predicted.