US new home sales rise 16.6% in May
Clothes shopping is back, at least online
WASHINGTON, June 24, (AP): Sales of new homes rose a surprisingly strong 16.6% in May with the reopening of major parts of the country potentially fueling activity in the housing market.
The Commerce Department reported Tuesday that sales of new single-family homes rose to a seasonally adjusted annual rate of 676,000 last month.
That was a much better performance than expected. Many economists had forecast that sales would fall in May.
The new home sales numbers come just one day after the US reported a 9.7% plunge in May sales of existing homes to an annual rate of 3.91 million, the slowest pace in nearly a decade.
There are hopes that the housing slump that occurred with the virus shutdowns could be coming to an end, though the millions of jobs lost to the pandemic could impede any rebound.
Nancy Vanden Houten, lead US economist with Oxford Economics, said she expected a modest recovery in sales in coming months following the big declines in the first quarter but she still expects a decline overall this year.
“The slow recovery in the labor market will limit the upside of any rebound in the housing market,” she said.
The median price of a new home rose 4.9% to $317,900 in May after falling by 8.7% in April, a drop that was attributed to heavy discounting by builders in the midst of the coronavirus shutdowns.
The big sales rebound left activity in May 12.7% higher than a year ago.
The total number of home loans in forbearance fell to 8.48% as of June 14, from 8.55% in the prior week, according to a survey from the Mortgage Bankers Association. About 4.2 million homeowners are now in forbearance plans, down from nearly 4.3 million homeowners the previous week.
“Fewer homeowners in forbearance underscores the continued improvements in the job market, and provides another sign of the fundamental health of the housing market, which has rebounded considerably over the past several weeks,” said Mike Fratantoni, MBA’s senior vice president and chief economist. But he warned that it’s unclear whether stimulus payments created a temporary bump in those numbers.
CANNED FOODS OUT, CLOTHING IN: It appears that pandemic-driven online shopping is shifting from the pantry to the closet as millions prepare to emerge from lockdown.
The number of people that purchased groceries online dropped from 31% last week to 29% this week, according to a Coresight Research survey. At the same time, Coresight said the focus for those shopping online has shifted to clothing. Although the number of respondents who bought clothing in stores was still lower than those who bought online, the figure increased about six percentage points, week over week.
Meanwhile, travel is resuming slowly with hotels and airlines operating under new rules. There is already some uneasiness about crowding and the lack of social distancing.
■ The Transportation Security Administration screened 607,540 people at US airports Monday, the highest total since March 19 but 78% lower than a year ago.
■ Lufthansa will resume flights to Shanghai on Wednesday, its first regular scheduled flights to mainland China since late January. The German carrier will offer one flight from Frankfurt to Shanghai every Wednesday, and in the opposite direction every Friday. Delta plans its first flight to Shanghai since early February on Thursday, when it resumes service from Seattle via Seoul.
■ Tokyo Disneyland and DisneySea will reopen on July 1 after being closed for four months. The parks will operate under government safety guidelines, said owner Oriental Land Co., with limits in attendance, and mandatory temperature checks and masks for visitors.
Disney plans to reopen its parks in Florida and California next month.
RETAIL: New York, a COVID-19 hot spot for months, is relaxing rules for beleaguered retail stores. But some of the push toward online shopping may become permanent.
■ Millions of people in Britain will be able to go to the pub, visit a movie theater, get a haircut or attend a religious service starting July 4, in a major loosening of coronavirus lockdown restrictions. But they will have to wait a bit longer to see a concert, get a tattoo or go to the gym.
Prime Minister Boris Johnson has announced that a swath of businesses can reopen, including restaurants, bars, hotels, hairdressers, cinemas and museums. Businesses including indoor gyms, pools, spas and tattoo parlors have to stay shut.