New home sales are finally on an upward path, after three months straight of month-over-month declines.
According to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD), new single-family home sales increased to a seasonally adjusted rate of 694,000 — a 4 percent month-over-month (+/- 18.6 percent) and an 8.8 percent year-over-year (+/- 17.0 percent) increase in home sales.
The estimate of new homes for sale at the end of January was 301,000, which represents a 5.2-month supply at the current sales rate.
Realtor.com chief economist Danielle Hale said March’s report represents positive progress, but there’s still much work to be done to meet buyer demand and quell rising home prices.
“New home sales rose again increasing 4 percent from last month and 8.8 percent from last year. This move is in the right direction, but there is still plenty of additional room to grow,” Hale said in an emailed statement. “New home sales made up 11 percent of all U.S. home sales in March, while in a normal market they would be 14 percent to 15 percent of sales.”
“Additionally, new home prices were up 4.8 percent. This is slightly below the increase of 5.8 percent that we saw in March existing home sales prices,” she added. “Rising prices are a mixed bag for the housing market. While homeowners benefit from extra equity, potential buyers can get discouraged as the dream of homeownership becomes more elusive.”
“On Thursday, we’ll see data on the homeownership rate for the first quarter of 2018 and get an indication of whether or not homebuyers have been able to succeed in spite of rising prices and mortgage rates.”
Other data from the Census Bureau and HUD:
- The median sales price of new homes sold in March was $337,200
- The average sales price was $369,900
- The Northeast experienced the greatest dip in residential home sales (-54.8 percent), followed by the Midwest (-2.4 percent). Only the South (0.8 percent) and the West experienced an increase (28.3 percent)
The Census Bureau and HUD use sample surveys to collect data for their home sales, which means this data is subject to sampling variability as well as the typical statistical variance. The survey is based on a sample of houses pulled from building permits. “Sales” are defined as deposits taken or sales agreements signed, not necessarily closings.
