City residents want homes in the suburbs

 Urban violence. The difficulty of urban social distancing. Too many closed businesses. Working from home means you can live anywhere. And record-low mortgage rates are spurring people to act now, who were planning to move out of the city someday. Working from home may be permanent for many more employees. Working from home is tougher in a city apartment, even with no kids present. It’s also easier to social-distance in the suburbs.

There's a big shift from some densely populated cities, especially from rental apartments. People are moving to homes in the suburbs, or to towns in cheaper parts of the country.  Plunging rents, and rising apartment vacancies, in New York City, San Francisco, San Jose, and Seattle, are evidence of this trend.

Three months of soaring new home demand could be the start of a longer term trend. The seasonally adjusted annual sales rate in August 2020 was  the highest since November 2006. The pandemic slowdown was only in March and April 2020.

Purchases of office furniture, electronic devices, higher-quality broadband, software, more coffee, more food, etc. have all increased for the transition from commercial office buildings to home offices.

Sales of new single-family homes in August jumped by 45.6% year-over-year, to 83,000 deals, not seasonally adjusted, matching July, and a little above June (79,000) -- all three months had the highest monthly sales since April 2007, although well below the 2004 through 2006 real estate bubble peaks.

Speculative ("spec") houses for sale (not built on order for a specific buyer) have been declining since March, as homebuilders are reducing their inventory. August homes for sale (282,000, not seasonally adjusted), were equal to only 3.4 months of August sales, the lowest inventory since 2004.

The median new home sales price in August fell 4.3% year-over-year to $312,000, which is still similar to the past four years. I assume sales have shifted to cheaper, more distant suburbs, or lower-cost states. Builders could also be targeting lower price points to meet consumer demand with the ultra-low mortgage rates