New home sales fall 8.6%

With home prices and mortgage rates on the rise, new home sales took a big step back in March.

Sales of new single-family houses in March 2022 were at a seasonally adjusted annual rate of 763,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.   

The latest report is 8.6% below the revised February rate of 835,000 and 12.6% below the March 2021 estimate of 873,000. 

The median sales price of new houses sold in March 2022 was $436,700 rising 3.6% from a median price of $421,600 in February. The March median price is also more than 21% above the median price of $359,600 in March 2021.

 The average sales price for March 2022 was $523,900, a 3.1% increase from an average price of $508,100 in February. The average price for March also jumped 26.3% from an average price of $414,700 for the same month a year ago.

Here’s how new home sales for March 2022 break down by region:

• In the Northeast, new home sales dropped 5.4% for the month but increased 12.8% on a year-over-year basis.
• Sales in the Midwest fell 8.7% and declined 13.8% in comparison to sales in March 2021
• The South saw a 10.2% decrease for the month and a 24.7% dropoff compared to last year.
• In the West, sales were down 6% in March but jumped ahead 21% from the March rate a year ago.

Builder confidence in the market for newly-built single-family homes moved two points lower to 77 in April, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released earlier this month.

The decline marked the fourth straight month that builder confidence has decreased. 

Existing-home sales also saw a 2.7% drop in March. According to Lawrence Yun, chief economist of the National Association of Realtors, sharply rising mortgage rates and higher inflation is taking a big hit on the purchasing power of potential home buyers.