Sales surpassed economists’ expectations. Builders say decreasing mortgage rates and the existing-home market’s lack of inventory probably pushed sales higher.
WASHINGTON, April 25 – Lower mortgage rates and limited existing inventory helped push March sales of newly built, single-family homes up 9.6% to a 683,000 seasonally adjusted annual rate, according to data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
The number surpassed economists’ expectations. A Reuters poll before the release found a generation expectation for only 630,000 units in March.
“A lack of resale inventory combined with many builders offering price incentives helped to push new home sales higher in March,” says Alicia Huey, chairman of the National Association of Home Builders (NAHB). “However, sales are down 3.4% compared to a year ago because of the shortage of electrical transformer equipment and building material price volatility.”
“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,” adds Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis.
A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the March reading of 683,000 units is the number of homes that would sell if this pace continued for the next 12 months.
New single-family home inventory fell 9.5% in March, but it remained elevated at a 7.6-months’ supply at the current building pace. A measure near a 6 months’ supply is considered balanced.
Completed, ready-to-occupy inventory stood at 70,000 homes in March, up 119% from a year ago. However, that inventory type remains just 16% of total inventory. Total new home inventory peaked in October at 466,000 and has been declining since that time, with a total inventory of 432,000 available for sale in March.
The median new home sale price rose in March to $449,800, up 3.2% year-to-year.
Regionally on a year-to-date basis, new home sales rose 1.7% in the Northeast, but they fell 19.6% in the Midwest, 5.8% in the South and 32.2% in the West.
© 2023 Florida Realtors®
©Florida Realtors®
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