Sales of new homes continue to soar, increasing by 13.9% to a seasonally adjusted rate of 901,000 for the month of July, and up 36.3% from the same period a year earlier, according to data released this week from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. New home sales are up 8% year over year.
We expect this trend to continue, as potential buyers come out of quarantine and head to the countryside in search of single-family homes. This shift is being driven by renters who are fleeing high-cost cities and driving down annual rental growth rates. Boston, Chicago, New York and Washington, D.C. are among the cities seeing multifamily annual rental growth rates decline by 1%-2%, while once red hot San Francisco is facing an 8% decline, according to CoStar.
It is not just renters either leaving the urban areas. According to Redfin, median sale prices in rural areas are up 11.3% in July, while those in the suburbs rose 9.2%. Meanwhile, urban areas saw a smaller 6.7% increase in home prices in the month.
Source: U.S. Census Bureau