NAHB: March New Home Sales Jump on Lower Rates
According to freshly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, sales of newly built, single-family houses jumped 9.6% in March to a seasonally adjusted annual rate of 683,000 from a downwardly revised estimate in February.
Reduced mortgage rates and limited current inventory contributed to an uptick in new home sales in March, even as builders grappled with rising building costs and material supply problems.
“A lack of resale inventory combined with many builders offering price incentives helped to push new home sales higher in March,” Alicia Huey, head of the National Association of Home Builders (NAHB) and a Birmingham, Alabama-based builder and developer, said.
“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,” NAHB’s assistant vice president for forecasting and analysis, Danushka Nanayakkara-Skillington, stated.
When a sales contract is signed or a deposit is accepted, a new home is sold.
The house can be in any stage of construction: unfinished, under construction, or finished. In addition to accounting for seasonal impacts, the March estimate of 683,000 units represents the number of homes that would sell if the current rate was maintained for the following 12 months.
The supply of new single-family homes declined 9.5% in March, although it remained high at 7.6 months at the current development rate.
A measure that is close to a six-month supply is deemed balanced.
In March, completed, ready-to-occupy inventory stood at 70,000 dwellings, rising 119% from the previous year. Yet, this inventory type accounts for only 16% of overall inventory.
Overall new home inventory peaked in October at 466,000 and has since been dropping, with 432,000 available for sale in March.
The median new home sale price increased 3.2% year on year in March to $449,800. Home prices have risen as a result of rising construction expenses.
Regionally, new house sales increased 1.7% in the Northeast year to date, but decreased 19.6% in the Midwest, 5.8% in the South, and 32.2% in the West.
