New home sales surge in the US

Sold For Sale Real Estate Sign in Front of New House.
Stock photo. Photo credit Getty Images

Sales of new homes surged last month with a 9.6% increase over February, according to a Tuesday news release from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.

Per the release, sales of new single‐family houses in March 2023 were at a seasonally adjusted annual rate of 683,000, compared to 623,000 in February. However, numbers from this March are 3.4% below the March 2022 estimate of 707,000.

Median sales prices for homes sold in March were $449,800 and the average sales price was $562,400.

Although the Census Bureau reported an uptick in new home sales last month, the National Association of realtors said Thursday that “pending home sales decreased in March for the first time since November 2022,” with only the South showing increases.

According to the association’s contract signing-based pending home sales index, pending contracts waned by 5.2% in March and 23.2% year-over-year.

“The lack of housing inventory is a major constraint to rising sales,” said NAR Chief Economist Lawrence Yun. “Multiple offers are still occurring on about a third of all listings, and 28% of homes are selling above list price. Limited housing supply is simply not meeting demand nationally.”

Going forward, the National Association of Realtors expects mortgage rates to drop. It expects the 30-year fixed mortgage rate to fall to 6% this year and to 5.6% next year.

“Sales in the second half of the year should be notably better than the first half as job gains continue and more favorable mortgage rates are expected,” Yun explained. “Sales of new homes are already matching 2019 pre-COVID activity and are expected to increase in 2023, largely due to plentiful inventory in this segment of the market.”

Featured Image Photo Credit: Getty Images