By NAHB
Constrained supply of existing homes and modest improvement in mortgage rates pushed new home sales higher in March.
Sales of newly built single-family homes rose 7.4% in March, to a seasonally adjusted annual rate of 682,000, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales is up 3.3% from a year earlier.
“An uptick in new home sales reflects improving demand conditions, supported by a modest pullback in mortgage rates and ongoing supply constraints in the existing home market,” said NAHB Chairman Bill Owens, a home builder and remodeler from Worthington, Ohio. “Builders are gradually increasing production, but elevated construction costs and labor shortages continue to limit the pace of expansion.”
“Looking ahead, the rise in new home sales points to a modest strengthening in residential construction activity in the near term,” said Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis. “However, the outlook remains sensitive to interest rate movements and affordability conditions, which will ultimately determine the sustainability of this momentum.”
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 682,000 units is the number of homes that would sell if this pace continued for the next 12 months.
