Buyer demand remains robust, with mortgage applications 22 percent higher than they were a year ago. Redfin surveyed homebuyers planning to purchase in the next 12 months and found that three out of four have had their plans impacted by the pandemic — and one out of four want to move or speed up their move as a direct result of the pandemic. With mortgage rates hitting a new low of 2.88 percent the week ending on August 6, August is shaping up to be the homebuying peak of 2020 (typically, May sees the most homebuying activity).

Multiple offers and bidding wars are holding strong in California’s luxury markets, and as more employees are able to work from home,rents are being driven down in expensive metro areas.

There does seem to be a mismatch between buyer demand and available inventory, with listings down 6.8 percent last week. That sellers remain cautious — even with homes selling so fast and often facing multiple offers — suggests recovery may be slower than hoped for, and buyers who are eager to purchase may not be able to afford to.

Sources: C.A.R. Research & Economics, REALTOR® Magazine, Redfin, Forbes, Inman News, Zumper

• New home sales leaped +55% annually in June, according to John Burns Real Estate Consulting
• Largest annual gain since sales explosion after housing crash one decade ago
• Highest sales pace since apex of housing boom in 2005

The nation’s home builders were doing handstands in June. New home sales posted a +55% annual gain, according to John Burns Real Estate Consulting’s monthly survey, the largest annual gain since the housing crash ten years ago. This +55% annual gain in new home sales coupled with the highest pace of sales growth since the housing boom in 2005.

Clearly this boom was driven in part by the COVID pandemic, historically low supplies of existing homes for sale, a rapid pace flight to the suburbs and exurbs and an increasingly strong consumer preference for brand-new, never before lived in, high tech homes with a wide range of amenities for both remote working and schooling.

John Burns, founder and CEO of JBRC, said, “The anecdotal evidence is overwhelming. Sales in the distant commuter areas are the most robust. I believe a lot of computer-oriented people have proven to their co-workers that they can be productive from home, and have sensed, or officially been given the green light, to work from home at least a significant portion of the time after a (coronavirus) vaccine has been found.”

Sheryl Palmer, CEO of Taylor Morrison, echoed Burns words. Palmer said in an interview on CNBC’s “Closing Bell,” “ There is a bias to new…people want new, fresh, a place where wellness features will really make sense for them…and…most recently…they want more rural or suburban locations.”

Buyers are particularly flocking to the Northeast and to Florida where annual sales popped +86% and +84%, respectively.

High demand + inventory dropping -20% to a 1.5 month supply + record low mortgage interest rates = +4.5% higher prices most everywhere save California where 14% of Southern California builders reduced their net prices in June.

With such high demand and with such fast sales rates in June, new home builders have only to contend with the usual high cost of finished lots and not always open or normally functioning permitting offices that slow their production. But, these problems are all in a day’s work for builders.

The problems that aren’t usual for builders are the problems driving every other businessperson and worker crazy are the current COVID infection surge and its partner, impending joblessness.

Thanks to CNBC.

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