Lower Interest Rates Bring New Home Sales Up in MarchApril 26th, 2019 by Brigid O'Leary
Newly released data from the U.S. Department of Housing and Urban Development (HUD) and the U.S. Census Bureau indicate that sales of newly built, single-family homes rose last month to the highest sales pace since November 2017, after a slightly revised February report. Those gains, National Association of Home Builders (NAHB) officials say, arrive mostly by way of lower-priced homes.
“These numbers indicate that builders who can produce housing at affordable price points will experience sales growth,” comments Greg Ugalde, NAHB chairman and a home builder and developer from Torrington, Conn.
At the same time, however, builders continue to face shortages of construction workers and buildable lots, he says, stressing the limits of affordability.
“We saw a large gain at lower price points where demand is strong,” says NAHB chief economist Robert Dietz. “In March of 2019, 50% of new home sales were priced below $300,000, compared to 39 percent in March of 2018.” Those price points, Dietz suggests, are what are most attractive for renters seeking to become homeowners, helping to drive sales.
In addition to adjusting for seasonal effects, the March reading of 692,000 units is the number of homes that would sell if the current pace continued for the next 12 months. The inventory of new homes for sale in March was 344,000, representing a 6 months’ supply. The median sales price was $302,700, down from the $335,400 median price of a new home a year earlier.
Regionally, and on a year-to-date basis, new home sales fell across the country except in the south, where they rose by 9.6 percent and where 58 percent of new home sales occurred in March.