New home sales in March were at a seasonally adjusted annual rate of 693,000, an increase of 8.8% compared with February and up 8.3% compared with March 2023, according to estimates from the U.S. Census Bureau and U.S. Department of Housing and Urban Development.
The median sales price of a new home sold in March was $430,700. The average sales price was $524,800.
As of the end of the month there were about 477,000 new homes available for sale in the U.S. – about an 8.3-month supply at the current sales rate.
New home sales have generally been strong so far in 2024, despite higher mortgage rates and rising home prices. That’s because the share of new homes has increased significantly in relation to the share of existing-homes. With many homeowners “rate-locked” into their existing homes, new homes are the only bright spot in a market suffering from low inventory.
“Although consumer demand has been somewhat dampened due to higher interest rates, builders continue to supply new homes to the market to lift inventory to make up for the low resale supply,” says Carl Harris, chairman of the National Association of Home Builders (NAHB), in a statement. “Rates moving above 7 percent, however, will move some home buyers to the sidelines as the spring progresses.”
“Shelter inflation remains the largest, lingering obstacle to lower inflation,” adds Robert Dietz, chief economist for NAHB. “More housing supply will ultimately tame shelter inflation growth and lower interest rates. This will improve the cost of financing for land developers and home builders and enable more attainable housing supply.”
“New Home Sales continue to be a bright spot in the housing industry,” says Selma Hepp, chief economist for CoreLogic, in a separate statement. “Homebuilder confidence and buying incentives are helping to counterbalance high values and interest rates. However, compared to years in the past, new home sales still aren’t performing as well as necessary to help reduce the high demand for new homes in the near term.”
Photo: Todd Kent