New home sales spring ahead in March

New home sales demonstrated solid growth in March, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.

Sales of new single‐family houses were at a seasonally adjusted annual rate of 683,000, rising 9.6% above the revised February rate of 623,000. 

On a year-over-year basis, sales continue to lag and are 3.4% below the March 2022 estimate of 707,000.

“A lack of resale inventory combined with many builders offering price incentives helped to push new home sales higher in March,” said Alicia Huey, chairman of the National Association of Home Builders (NAHB) and a builder and developer from Birmingham, Ala. “However, sales are down 3.4% compared to a year ago because of the shortage of electrical transformer equipment and building material price volatility.”

While some home builders across the country have lowered their prices in recent months, the cost of a new home remains far out of the reach of many U.S. households. 

The median sales price of new houses sold in March increased more than 3.8% to $449,800 compared to a median price of $433,200 in February. This is also a 3.2% increase from a median price of $435,900 for the same period a year ago.

 The average sales price for March was $562,400, jumping ahead more than 12% from an average price of $501,800 in the previous month. The average cost of a new home is up nearly 10% from the average price of $511,800 in March 2022.

New houses for sale at the end of March, on a seasonally adjusted basis, were 432,000.  This represents a supply of 7.6 months at the current sales rate and a 9.5% decline compared to an 8.4-month supply in February.

“The average Freddie Mac mortgage rate gradually fell from near 6.7% at the beginning of March to 6.3% at the end of the month, and this helped to push new home sales higher in March,” said Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis.