U.S. sales of new homes plunged 15.4% in March as coronavirus-triggered shutdowns that began in the middle of the month started 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 a decline of 4.6% in February.
The drop was expected, though economists say it will grow much bigger as the country struggles with a shutdown that has thrown millions of people out of work and disrupted wide swaths of the economy.
The median price for a new home sold in March was $321,400, down 2.6% from $330,100 in February.
By region of the country, sales fell a sharp 41.5% in the Northeast and 38.5% in the West. Both regions had states that implemented stay-at-home orders sooner than other parts of the country. Sales fell 8.1% in the Midwest and inched down 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 effects of the coronavirus wane.
“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.