Washington, April 23, 2024 – U.S. new home sales rose unexpectedly in March to the highest level in eight months, defying economists’ expectations. The Commerce Department reported Tuesday that new home sales surged 8.8% to a seasonally adjusted annual rate of 693,000 units from a revised rate of 637,000 in February.
March’s sales pace was the strongest since last September. Economists had forecast new home sales to rise to 668,000 from a preliminary reading of 662,000 in February.
The stronger-than-expected reading was driven by a 27.8% surge in sales in the Northeast to a 46,000 annual rate. Sales also rose in the West (8.6%), South (7.7%) and Midwest (5.3%).
The median price of a new home sold in March was $430,700, down 1.9% from $438,900 a year ago.
New home sales account for more than 10% of total home sales in the U.S. While the housing market continues to be supported by a shortage of homes for sale, rising mortgage interest rates are taking a toll on affordability.
In contrast to new homes, sales of existing homes fell 4.3% in March to a seasonally adjusted annual rate of 4.19 million units from a 9.5% increase to 4.38 million in February. Economists had forecast existing home sales to dip to 4.20 million.
The average interest rate on a 30-year fixed mortgage has climbed back above 7%, according to Freddie Mac. Data showing a strong labor market and inflation suggest the Federal Reserve could delay its expected interest rate cuts this year. Some economists even doubt the U.S. central bank will lower borrowing costs at all in 2024.
Source: Reuters, RTTNews
Additional information:
- The National Association of Realtors (NAR) reports on existing home sales each month.
- The Census Bureau and the Department of Housing and Urban Development (HUD) report on new home sales each month.
- Freddie Mac reports on mortgage interest rates each week.
