“Consumers find themselves asking a lot of questions today,” said Ali Wolf, chief economist for Zonda and NewHomeSource. “When asking ‘should I buy now or wait?’, the answer for many is to wait. For ‘new or existing?’, new homes often come out on top. And when it comes to ‘rent or buy?’, renting is frequently the winning choice. The housing industry must continue exploring innovative strategies that position purchasing a new home as the most compelling choice compared to renting or buying a resale property in today’s market.”
While the national new home market still has lower supply levels compared to 2019, competition has notably increased. Beyond just incentives, many consumers are now seeking price cuts. There were 682,290 new homes sold in May on a seasonally adjusted annualized rate. This fell 0.9% from last month and a drop of 5.8% from a year ago.
Pricing continued to be mixed
Zonda’s monthly survey showed 38% of builders lowered prices in May (35% in April), 57% held prices flat (49% in April), and 6% raised prices (16% in April).
- Entry-level fell 1.4% to $328,007 year-over-year
- Move-up fell by 0.4% to $520,193 year-over-year
- High-end is up by 1.0% to $918,161 year-over-year
Community counts ticked up for 6th straight month
There are 16,278 actively selling communities, up 8.6% from last year (+0.7% from last month).
- Orlando (+21.9%), Raleigh (+14.2%), and Charlotte (+12.8%) grew most year-over-year
- Philadelphia (-14.4%), Minneapolis (-11.4%), and Washington, DC (-11.0%) had the biggest year-over-year declines
Quick move-ins moved up year-over-year (QMIs can be occupied within 90 days)
National QMIs totaled 36,123, up 18.9% from last year but fell 1.3% month-over-month. On a metro basis, 72% of Zonda’s select markets increased QMI count year-over-year.
- Seattle (+135.0%), New York (+101.7%) and Salt Lake City (+83.2%) grew most year-over-year
- Sacramento, Jacksonville, and Phoenix grew most compared to the same time in 2019, up 248.3%, 240.6%, and 181.2%, respectively
