New home sales drop in coronavirus pandemic, falling 15% in March
Experts predict the decline will worsen as the COVID-19 shutdown continues
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U.S. new home sales plunged 15.4% in March as a winding down in the middle of the month due to the coronavirus began to rattle the housing market.
The Commerce Department reported Thursday that sales of new single-family homes dropped to a seasonally adjusted annual rate of 627,000 last month after sales had fallen 4.6% in February.
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The decline was expected, though economists say it will grow much worse as the country struggles with a shutdown that has thrown millions of people out of work and disrupted wide swaths of the economy.
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The median price for a new home sold in March was $321,400, down 2.6% from a median price of $330,100 in February.
By region of the country, sales fell a sharp 41.5% in the Northeast and were down 38.5 in the West. Both of those regions had states that implemented stay-at-home orders sooner than other parts of the country.
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Sales fell 8.1% in the Midwest and were down a slight 0.8% in the South.
Ben Ayers, senior economist at Nationwide, said that sales activity in coming months will take a significant hit from the government-mandated shutdowns and layoffs. But he said the outlook for the housing sector should improve as the virus impacts wane.
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"Low mortgage rates and continued demand from the millennial generation should drive a rebound in housing activity later this year and into 2021," he said.