ConDig (25-Apr-23).  Sales of new single-family homes jumped 9.6% higher in March on lower mortgage rates and tight inventory levels, according to latest data from the U.S. Census Bureau.

New single-family homes rose to a 683,000 seasonally adjusted annual rate from a downwardly revised reading in February of 623,000 units. This is the highest level since March 2022.

But new single-family home inventory dipped 9.5%, though remained elevated at a 7.6 months’ supply at the current building pace. A measure near a 6 months’ supply is considered balanced. Completed, ready-to-occupy inventory stood at 70,000 homes in March and is up 119% from a year ago. 

“A lack of resale inventory combined with many builders offering price incentives helped to push new home sales higher in March,” said Alicia Huey, chairman of the National Association of Home Builders (NAHB). 

“However, sales are down 3.4% compared to a year ago because of the shortage of electrical transformer equipment and building material price volatility.”

The average Freddie Mac mortgage rate gradually fell from near 6.7% at the beginning of March to 6.3% at the end of the month, and this helped to push new home sales higher in March, the NAHB added.

The median new home sale price increased to $449,800 in March, up 3.2% compared with a year ago, as the high costs of construction have underpinned a rise in home prices.

Regionally, on a year-to-date basis, new home sales edged up 1.7% in the Northeast, but fell 19.6% in the Midwest, 5.8% in the South and 32.2% in the West.