New home sales were at a seasonally-adjusted annual rate of 724,000 in March, a jump of 7.4% compared with February and up 6.0% compared with March 2024, according to estimates from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
Helping to drive the increase was a drop in mortgage rates that came during the month.
As of the end of March there were about 503,000 new homes available for sale in the U.S. – an increase of 0.6% compared with February and up 7.9% compared with March 2024.
That’s about an 8.3-month supply at the current sales rate.
The median sales price of a new home sold in March was $403,600 – down 1.9% compared with February and down 7.5% compared with March 2024.
The average sales price of a new home sold in March was $497,700 – up 1.0% compared with the previous month but down 4.7% compared with a year ago.
“The March new home sales data shows that demand continues to be present in the market, provided affordability conditions permit a purchase,” says Buddy Hughes, chairman of the National Association of Home Builders (NAHB), in a statement. “An increase in economic certainty would be a big boost to future sales conditions.”
“Lower mortgage interest rates helped boost the pace of new home sales in March,” says Robert Dietz, chief economist for NAHB. “In February, the average 30-year fixed rate mortgage was 6.84 percent, while in March it fell to 6.65 percent.”
“While home sales are showing a seasonal uptick, they are weaker than expected and continue to trend below 2024 levels despite new for-sale inventory reaching the highest level since 2009,” says Selma Hepp, chief economist of Cotality (formerly CoreLogic), in a separate statement. “In addition, many markets with growing new inventories have also experienced a significant rise in existing inventories and weakening overall demand, which is challenging homebuilders’ pricing power and poses the need for more incentives.”
“Also, in addition to homebuilders’ challenges stemming from potential tariff impacts and rising labor costs, the housing market is facing a repeated challenge from a recent jump in mortgage rates, which are likely to remain volatile and elevated, particularly considering the Federal Reserve’s independence being called into question,” Hepp adds.
Photo: Amanda Smith