Lower Interest Rates Help Boost March New Home Sales
The median sales price was $302,700, with strong gains in homes sold at lower price points.
Sales of newly built, single-family homes rose to a seasonally adjusted annual rate of 692,000 units in March 2019 after a slightly revised February report, according to data released by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the highest sales pace since November 2017.
“These numbers indicate that builders who can produce housing at affordable price points will experience sales growth,” said Greg Ugalde, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Torrington, Conn. “However, builders are still dealing with a shortage of construction workers and buildable lots, which limits housing affordability.”
“We saw a large gain at lower price points where demand is strong,” said Robert Dietz, NAHB’s chief economist. “In March of 2019, 50% of new home sales were priced below $300,000, compared to 39% percent in March of 2018. These are the price points that are attractive for renters seeking to become homeowners.”
A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction, or completed. In addition to adjusting for seasonal effects, the March reading of 692,000 units is the number of homes that would sell if this pace continued for the next 12 months.
The inventory of new homes for sale was 344,000 in March, representing a six-months supply. The median sales price was $302,700, with strong gains in homes sold at lower price points. The median price of a new home sale a year earlier was $335,400.
Regionally, and on a year-to-date basis, new home sales fell 17.6% in the Northeast, 8.1% in the Midwest and 5.9% in the West. Sales rose 9.6% in the South, where 58% of new home sales occurred in March.
Additional information is available at www.nahb.org.