More buyers are being drawn to new-home construction during the pandemic. Construction of single-family homes last month soared to the highest level since the spring of 2007. New-home construction is up 8.6% from a year ago, the Commerce Department reported last week.
The top performing new-home markets in October were Raleigh. N.C.; Denver; and Jacksonville, Fla., according to Zonda’s New Home Pending Sales Index, which reflects the number of new-home sales contracts signed nationwide. (Zonda is a research firm formerly known as Meyers Research.) Builders in these markets are selling homes at a quick pace and also pulling an increasing number of new permits, which indicates future construction.
The local economies in Denver and Jacksonville are outperforming the national average, with an estimated 60% and 65% of all the jobs lost in March and April now recovered, respectively, according to Zonda’s report. For comparison, the national average is 54%.
“As COVID-19 hospitalizations rise and parts of the country start shutting down again, housing plays an even greater role in our life,” says Ali Wolf, chief economist at Zonda. “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.”
The largest upticks in new-home sales in October, according to Zonda’s Pending Sales Index, are in:
- Raleigh, N.C.: 81.7% (year-over-year gain)
- Denver: 69.3%
- Jacksonville, Fla.: 68.4%
- Atlanta: 66.4%
- Washington, D.C.: 58.9%
- Austin, Texas: 56.5%
- Dallas: 43.7%
- Tampa, Fla.: 39.7%
- Philadelphia: 38.6%
- Houston: 37.7%
- Seattle: 32.8%
- San Antonio: 32.4%
- Salt Lake City: 32.3%
- San Francisco: 31.8%
- Orlando, Fla.: 31.7%
- Phoenix: 28.8%
- Las Vegas: 25.6%
- Los Angeles/OC: 24.4%
- Cincinnati: 15.9%
- New York: 5%
Read about how the existing-home market is faring: Homes Sales Are on Fire, Up 27% From a Year Ago
Source: Zonda
