New home sales dropped 15.4% to an adjusted rate of 627,000 units in March, the U.S. Census Bureau reports. The rate is down 9.5% compared with March 2019.
The first quarter of 2020 had a 6.7% increase in new home sales compared with the same period in 2019, signalling a strengthening of sales prior to the economic downturn spurred by COVID-19.
"The drop in March sales reflects buyer concerns over the virus, and was primarily concentrated in the hardest hit regions of the Northeast and West," stated Robert Dietz, chief economist for the National Association of Home Builders. "The weakening in sales is in line with our builder surveys that showed dramatic declines in buyer traffic and builder confidence in April. We expect further slowing of the pace of new home sales in April, as jobless claims continue to rise, before stabilizing later this year."
New home inventory fell 1.2% compared with March 2019 to 333,000, a supply of 6.4 months at the current sales pace. The median sales price for new homes was $321,400 in March.
Regionally, new home sales fell 41.5% in the Northeast, 38.5% in the West, 8.1% in the Midwest and 0.8% in the South.
