Zonda’s New Home Pending Sales Index rose by 28.1% year over year in January, up to an index reading of 156.6. According to Zonda, this signals an “early start” to the spring selling season driven by favorable demand conditions.
Month over month, new-home sales fell by 4.2% nationwide. The top performing markets for new-home sales year over year are Jacksonville, Florida, up 45.8%; Austin, Texas, up 42.3%; and Raleigh, North Carolina, up 35.4%. Zonda attributes their strong performance to favorable migration trends, high quality of life, and relative affordability.
“The spring selling season waited for no one this year as many people were still working from home and reevaluating their living situation, mortgage rates were still seriously low, and available homes for sale were still limited. The demand environment is about as good as it gets in the housing market,” says Ali Wolf, chief economist at Zonda. “… Demand is so hot right now that campouts are back at select communities, and some builders have reported hitting the best weeks and/or months in the history of their companies.”
This month, Zonda’s PSI report includes the year-over-year change on the raw index values for two of the New Home PSI data points: the average sales rate per community and the total new-home orders. While new-home orders consider total sales and are affected by supply issues, average sales rates per community capture sales performance without any influence from supply.
This, according to Zonda, provides additional transparency in the pending home sales number, particularly why some markets experienced a year-over-year drop. Austin has experienced the strongest rise in new-home orders at 32.2%, while Jacksonville has seen the strongest average sales rate at 68.4%.
By this metric, Salt Lake City and Las Vegas are the only metros in Zonda’s select list to post a year-over-year drop in the average sales rate per community. However, this is by design, as some builders in both markets have needed to cap their sales in the face of heavy demand.
