The stay-at-home trend prompted by the coronavirus pandemic has benefited retailers including Home Depot
Existing-home sales rose for the fourth straight month in September to a seasonally adjusted annual rate of 6.54 million, up nearly 21% from a year ago, the National Association of Realtors said Thursday. The median existing-home price rose about 15%, to $311,800. Total housing inventory dropped to 1.47 million, enough to last 2.7 months—a record low at the current sales pace, the trade group said.
Properties typically remained on the market for just 21 days in September—also an all-time low, NAR said.
“Home sales traditionally taper off toward the end of the year, but in September they surged beyond what we normally see during this season,” said Lawrence Yun, NAR’s chief economist and a former Forbes.com contributor. Demand was aided by record-low interest rates and “an abundance of buyers,” including those seeking vacation homes because of the increased flexibility to work from home, he said.
It’s not just existing homes that are being snatched up. The latest data from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development in September showed sales of new single-family houses in August jumped 43%, to more than 1 million, from a year earlier.
“Exceptionally low interest rates, the ongoing movement of millennials into home ownership and some level of desire to move away from our urban centers” will continue to boost demand, Ryan Marshall, the president and CEO of the home builder PulteGroup
Even with the reopening of cities and consumers feeling more comfortable going out, the latest home sales data suggest the home-related spending and behavior changes aren’t likely changing anytime soon.
Gordon Haskett analyst Chuck Grom said this month that the firm’s latest household survey, its 13th, showed consumer spending on items for their home had reached the highest level during the pandemic.
Consumer products giant P&G reported this week that its home-care product sales surged more than 30% in the most recent quarter, led by increased demand for cleaning products. P&G and its rival Reckitt Benckiser both suggested consumer behavior might have changed permanently.
Home Depot, the largest home improvement retailer, in August reported a record 25% jump in U.S. comparable sales.
“Our customers engaged with home improvement in a meaningful way,” Home Depot CEO Craig Menear said at the time, adding that customers were taking on projects from deck building to landscaping. Home Depot noted “very strong performance” across big-ticket categories like appliances, riding lawnmowers and patio furniture.
Costco CFO Richard Galanti said recently that the company, the No. 1 membership warehouse club chain, had benefited from demand for the home outside of the food area. The company has also seen online sales of big and bulky items such as lawn furniture and home exercise equipment surprisingly growing, he said in September.
The stay-at-home trend isn’t just benefiting those categories directly tied to the home. Fast-casual restaurant chain Chipotle said Wednesday that its third-quarter sales from online orders had more than tripled to represent 49% of sales as more consumers work at home and dine-in service remains limited. As consumers eat more breakfast and other meals at home, beverage giant PepsiCo
“We’re investing to retain those new families,” PepsiCo CEO Ramon Laguarta said on an earnings call this month. Even as consumers return to the office, “it’s going to be a much more flexible environment and much more tech-enabled remote kind of work, where consumers will be at home a few days of the week.”
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