U.S. new home sales fall sharply in March

U.S. new home sales eased markedly like other economic indicators, in response to covid-19. The new home sales fell 15.4 percent in March, as compared with the expected fall of 15.8 percent. However, this change occurred from downward revisions in the prior three months that left the February level 3.1 percent below the preliminary estimate. The combination of the revisions and the latest fall left the level of sales in March a bit below the consensus estimate (627,000 units versus the expectation of 644,000).

All four regions added to the decline, with the Northeast and West recording sharp fall of 41.5 and 38.5 percent, respectively. The declines of 8.1 percent in the Midwest and 0.8 percent the South were tame by comparison.
 

“While new home sales in March were weak, the decline was not as shocking as results in other economic reports. The new level of sales in March trailed the average from last year (684,000), but it remained above results in other years of the latest expansion (e.g. 615,000 in 2018). We suspect that activity was reasonably well maintained in the early portion of the month, when the spread of the virus was in its early stages, and many individuals would be interested in taking advantage of low mortgage rates”, said Daiwa Capital Markets in a research report.