Newly built single-family home purchases hit a 15-year high in March, beating all forecasts from a Bloomberg poll.
New home sales rose 20.7% month-on-month to an annual rate of 1.02 million, according to statistics from the US Census Bureau and the Department of Housing and Urban Development. The March surge was above the revised February pace of 846,000 and is 66.8% above the March 2020 estimate of 612,000.
The upswing is a positive sign that supply is starting to keep pace with demand, according to Holden Lewis, mortgage expert at NerdWallet. More and more owners are tempted to put their homes up for sale as property values have skyrocketed.
“House prices rose 17.2% yoy in March and have risen by double digits for eight straight months. Prices cannot rise so quickly indefinitely, especially if mortgage rates rise too,” he said. “Ultimately, higher prices should force more homeowners to put their homes up for sale. Increasing the supply would slow the pace of house price increases.”
The median sales price for new homes was $ 330,800 in March, compared to $ 328,200 a year ago. At the current sales rate, it would take 3.6 months to exhaust the supply of 307,000 new single-family homes for sale – a 44.6% decrease from last year.
Overall, housing starts rose 19.4% in March to a seasonally adjusted annual rate of 1.74 million units – the fastest pace for combined single and multi-family construction since June 2006, the report said. Homes sold that have not yet started construction are up 150% year over year, indicating that the delays and higher costs associated with construction are on the increase.
“Our members see strong buyer traffic as still low Mortgage rates help sell fuel“said Chuck Fowke, chairman of the National Association of Home Builders (NAHB).” However, builders are still facing major supply chain problems and rising material costs, causing delays in construction and preventing them from contributing to the already very low inventory. “
At the regional level, sales have increased in three out of four regions since the beginning of the year. In the Northeast, sales rose 36.6%, while sales in the Midwest and South rose 53.9% and 50.5%, respectively. In the west, new home sales fell 3.3%.