The housing market is closely linked to the overall health of the economy. With job losses mounting and the economy taking a hit, the outlook for homebuilders hasn’t been great. However, data supplied by the Mortgage Banker’s Association showed that purchase applications increased every week for the past three weeks.
According to the National Association of Realtors (NAR) chief economist Lawrence Yun, “Although the pandemic continues to be a major disruption in regards to the timing of home sales, home prices have been holding up well. In fact, due to the ongoing housing shortage, home prices are likely to squeeze out a gain in 2020 to a new record high.” Builders have also reported a pickup in building activity. The NAHB housing market index also rose from 30 in April to 37 in May.
However, businesses like Pulte Construction have focused heavily on the starter home market. That segment had been one of the best performing before the pandemic. But, recent data from NAR paints a different picture. Home sales for units priced between $100,000 and $250,000 fell everywhere in the US except the midwest. Homes priced below $100,000 fell across the board. So, there are indications that first-time buyers may be delaying their purchases.
Industry insiders believe that spring home sales are being pushed to the fall season rather than being canceled completely. All eyes will now be on the April data which will be released in late May.
PulteGroup Inc was founded in 1950 and is headquartered in Atlanta, GA. It has homebuilding operations in various US states in the northeast, mid-Atlantic, south, south-west, California, and some parts of the north-west. It is a national homebuilding business. The PulteGroup stock closed at $31.42 on 20th May 2020, up 11.18% for the month.