In a statement seemingly derived from Mr. Obvious:
"Buyers have grown nervous about purchasing a home right now because of the coronavirus pandemic and the resulting economic downturn."
Sales of newly-constructed homes in the U.S. sank 15.4% in March, with the national downturn in new-home sales led by a 41.5% drop in sales activity in the Northeast and a 38.5% drop in the West, while February's national sales pace was revised downward. Starts for new multi-family homes (like apartment complexes) with five or more units tumbled 31.6%. That means overall housing starts fell by 22.6% from February to March.
That still may not seem like a huge number, given everything that's going on right now, but it's the biggest month-over-month percentage drop in more than 35 years.
"If you thought March's residential housing report was bad, brace yourself for a downright ugly report in April", according to John Bromels of 'MSN Money'.
And signs suggest that will be the case. A survey of 65 private mid-size regional home builders conducted by financial services firm BTIG during the week of April 20 found that 85% of builders reported a slower-than-normal sales pace.
Additionally, the Federal Housing Finance Agency announced that Fannie Mae and Freddie Mac will ease rules for mortgage servicers and buy up loans that slipped into forbearance.
Fannie and Freddie previously avoided such loans, but the coronavirus' broad economic impact and hit to the U.S. housing sector placed a considerable strain on the key lending market. The policy change will allow Fannie and Freddie to alleviate some credit stresses and temporarily buy the mortgages, according to FHFA.