Despite higher interest rates last month, new home sales rose in March due to limited inventory of existing homes, according to data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. However, the pace of new home sales will be under pressure in April as mortgage rates moved above 7% this month, which is expected to moderate sales and increase the use of builder sales incentives this spring.
Key takeaways
- Sales of newly built, single-family homes in March rose 8.8% to a 693,000 seasonally adjusted annual rate from a downwardly revised reading in February.
- The pace of new home sales in March is up 8.3% from a year earlier.
- New single-family home inventory in March remained elevated at a level of 477,000, up 2.6% from February.
- Inventory of newly-built single-family homes is up 10.2% on a year-over-year basis, according to data from the National Association of Realtors.
NAHB's take on the data
“Shelter inflation remains the largest, lingering obstacle to lower inflation,” says National Association of Home Builders Chief Economist Robert Dietz. “More housing supply will ultimately tame shelter inflation growth and lower interest rates. This will improve the cost of financing for land developers and home builders and enable more attainable housing supply.”
