The New Home Pending Sales Index grew 2.7% month-over-month and 46.9% year-over-year, continuing the momentum of the ‘super V’-shaped housing recovery. The work-from-anywhere shift combined with seriously low mortgage rates and an improving economy all bode well for the housing market.
New Home Pending Sales Index For Select Markets
Pending new home sales trended above September 2019 levels in nearly every top market across the country.
The best new home markets in September were Denver, Jacksonville, and Raleigh. All of these markets are benefitting from positive net in-migration and are among the top markets in the country for Millennials.
Builders in Denver are outselling the national average across all categories: entry-level, move-up, and luxury.
The strength in the housing market is nearly universal across different price points, geographies, and demographic cohorts.
“After spending more time at home for the majority of 2020, many home shoppers realized that more space or an extra bedroom would be nice, and today’s low mortgage rates can help them get there.”
The Zonda New Home Pending Sales Index (PSI) is built on proprietary, industry-leading data that covers 60% of the production new home market across the United States. Reported number of new home pending contracts are gathered and analyzed each month. Released on the 15th business day of each month, the New Home PSI is a leading indicator of housing demand compared to closings because it is based on the number of signed contracts at a new home community. Zonda monitors 18,000 active communities in the country and the homes tracked can be in any stage of construction.
The new home market represents roughly 10% of all transactions, allowing little movements in supply to cause outsized swings in market activity. As a result, the New Home PSI blends the cumulative sales of activity recently sold out projects with the average sales rate per community, which adjusts for fluctuations in supply. Furthermore, the New Home PSI is seasonally adjusted based on each markets’ specific seasonality, removes outliers, and uses June 2016 as the base month. The foundation of the index is a monthly survey conducted by Zonda. It is necessary to monitor both new and existing home sales to establish an accurate picture of the relative health of the residential real estate market.
The data provided in this release are for use only by the primary recipient or the primary recipient’s publication or broadcast. This data may not be modified, resold, republished or licensed to any other source, including publications and sources owned by the primary recipient’s parent company without prior written permission from Zonda.