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Sales of newly built single-family homes leaped 9.6 percent in March to a one-year high, up from the revised February 2023 estimate of 623,000, according to data released Tuesday by the U.S. Census Bureau and Department of Housing and Urban Development.
New-home sales clocked in at a seasonally adjusted annual rate of 683,000, according to estimates. Sales, however, were down 3.4 percent from the March 2022 estimate of 707,000.
Still, the strong month-over-month increase in sales marked the fourth-consecutive month of increases, showing that buyers are gradually easing back into the market in preparation for the real estate industry’s busiest season, and adjusting to a new landscape of higher mortgage rates.
“Buyers have begun to adjust to the elevated mortgage rate levels, especially in areas where home prices have adjusted downwards to compensate,” Kelly Mangold of RCLCO Real Estate Consulting said in a statement emailed to Inman.
“Despite signs of economic uncertainty in March, which included news of bank failures, buyers are still showing demand for new homes,” Mangold added. “There is a cohort of buyers who would have preferred to move sooner and are now making the decision after an extra year or two of saving and possibly adjusting their expectations.”
The median sales price of new homes sold in March 2023 was $449,800, up from $438,200 in February. The average sales price in March was $562,400, up from $498,700 the month before.
By the end of March, the seasonally adjusted estimate of new homes for sale was 432,000, which represented 7.6 months of supply at the current sales rate.
Month over month, new-home sales rose a stunning 170.8 percent in the Northeast and by a healthy 29.8 percent in the West between February and March. Sales climbed by a more modest 6 percent month over month in the Midwest while dropping by 5.4 percent in the South, the Census Bureau reported.
As sellers have been more hesitant to list in the current economic and mortgage rate environment, more buyers have turned to new construction, helping boost March’s numbers, a report released last week by market data firm Zonda suggested.
“Home shoppers, frustrated by the lack of resale inventory and high prices, are pleasantly surprised by the options and offers available form the new-home side,” Zonda Chief Economist Ali Wolf told Builder Magazine. “Quick move-in homes were viewed more of a liability when the demand pool retrenched at the end of last year but are more of an asset today as buyers look to move during the spring selling season.”