New Home Sales Increased in March Despite Uncertain Market Conditions

Even as builders and consumers face uncertain market conditions, a minor drop in mortgage rates and low current inventory helped boost new home sales in March.

According to newly released data from the United States Department of Housing and Urban Development and the United States Census Bureau, sales of newly built, single-family houses jumped 7.4% in March to a seasonally adjusted annual rate of 724,000 from a revised January figure.

New house sales increased by 6.0% in March compared to the same month last year.

The March new home sales numbers demonstrate that demand remains strong in the market, as long as affordability conditions allow for a purchase.

An increase in economic certainty would significantly benefit future sales conditions. Lower mortgage interest rates aided the pace of new house sales during March.

In February, the average 30-year fixed rate mortgage was 6.84%, but in March, it dropped to 6.65%.

A new home sale takes place when a sales contract is signed or a deposit is accepted. The home can be at any stage of development: unfinished, under construction, or completed.

In addition to compensating for seasonal impacts, the March reading of 724,000 units represents the number of homes that would sell if the current rate maintained for the following 12 months.

In March, new single-family home inventories rose to 503,000, a 7.9% increase over the previous year. This equates to an 8.3-month supply at the current building rate.

This amount of supply is appropriate, given that the resale, single-family months’ supply is still low at 3.4.

The number of completed, ready-to-occupy homes for sale rose to 119,000, up 34% from a year ago.

However, the March data also indicates that the total amount of inventory in the new building sector has slowed due to soft housing conditions at the beginning of 2025.

For example, the number of new homes under construction for sale (263,000 in March) is down 5% year on year and 6% below the non-seasonally adjusted peak count established in October 2024.

The typical new house sale price in March was $403,600, a 7.5% decrease from a year earlier.

Sales were especially good at low price points. Compared to March 2024, new home sales were 33% higher for homes priced under $300,000 and 28% higher for homes priced between $300,000 and $400,000.

Regionally, new house sales are up 12.9% year to date in the South, but down 32% in the Northeast, 18.3% in the Midwest, and 6% in the West.

[Read more about this story at Eyeonhousing.org]