Share
- Contracts for new home sales tumbled 14.5% from February to March, to a seasonally adjusted annualized rate of 384,000. This decline is a sharp acceleration of the declining trend that began last month. New home sales are 13.3% lower than the same period a year ago. Mortgage rates have increased roughly 1% to 4.5% over that same time frame while home prices are roughly 12% stronger.
- Inventories rose 3.2% from February to March and are up nearly 25.3% relative to the same time last year. This increase brings the months supply of home sales up to 6 months, still in neutral territory.
- The median price for a new home under contract jumped 12.6% over the 12-month period ending in March to $290,000. The median existing home price was 31.7% lower at $198,200, more than three times the historical average spread of 10.8%, suggesting that existing homes are a bargain by historical standards. According to the BLS, a shortage of skilled labor and rising labor costs have contributed to the rising median price of new homes.
- It appears that new home sales have begun to feel the weight of the sharp increase in mortgage rates, home price gains, and the erosion of affordability over the last 12 months. The impact of weather on new production will ease through the summer, resulting in additional inventory coming on line in six to nine months. However, inventory remains tight and prices continue to rise. A moderate increase in inventory will help to steady prices to a historically stable growth path.
Notice: The information on this page may not be current. The archive is a collection of content previously published on one or more NAR web properties. Archive pages are not updated and may no longer be accurate. Users must independently verify the accuracy and currency of the information found here. The National Association of REALTORS® disclaims all liability for any loss or injury resulting from the use of the information or data found on this page.