MarketNsight Principal John Hunt recently projected that May new construction pending sales would be up 12% from 2018 closings. Opportunely, once all of the data was in, May pending new home sales were up a whopping 28% year-over-year!
“In fact, this is the highest number of pending sales for May since the great recession,” Hunt said. “This is a big deal!”
Hunt’s data shows that partial June new pending sales are trending the same, so expect another big monthly year-over-year increase.
“Interest rates have a direct effect on new home sales and interest rates are down,” Hunt said. “This is definitely a contributing factor to the increase, as it allows homebuyers to purchase a slightly more expensive home.”
Hunt also sees pent-up demand as a factor. Buyers were waiting to see what happened with the economy and interest rates.
Hunt’s prediction for the remainder of the year is that long term sales moderation will continue. However, the good news is that the Atlanta market has recovered from the Q4 2018 and Q1 2019 devastation caused by the interest rate hike that slowed sales and kept potential homebuyers out of the market.
MarketNSight is focused on helping home builders and developers make smart decisions related to purchasing land and pricing product. Its groundbreaking Feasibility Matrix® systemizes the decision-making process and creates a one-stop-shop for gauging new home community feasibility including ranking by builder and subdivision and developed lot and raw land sales. To learn more or to schedule a demonstration, visit www.MarketNsight.com.