ARLINGTON, Va.—New-home sales fell 8.6% in March to 763,000 annualized units, while February saw an upward revision of 47,000 units. Compared to last year, March sales were 12.6% lower.
“New home sales dropped sharply in March,” said NAFCU Chief Economist and Vice President of Research Curt Long. “While the spike in interest rates is undoubtedly having some impact, construction delays appear to be the main culprit. Builders are reportedly throttling sales to save on the limited inventory they have. While the total number of homes for sale grew by 33% over the past year, completed homes for sale increased by just 6%."
Sales fell in all Census regions in March with the South falling 10.2%, followed by the Midwest (-8.7%), the West (-6%), and the North (-5.4%).
Based on current month sales, there were 6.4 months of supply in March, up by 0.8 months from February. Unsold homes left on the market increased by 15,000 homes to 407,000, representing a 33.4% increase from year-ago inventory levels.
Builder Confidence Falls
“According to the National Association of Home Builders/Wells Fargo Housing Market Index, builder confidence in the market for new single-family homes fell for the fourth straight month," noted Long. "The main factor behind the latest decline was slower foot traffic.
"NAFCU expects hew home sales to trend up mildly through the rest of the year due to even greater inventory shortages in the existing home market," concluded Long.
Of note, the median home price, non-seasonally adjusted, rose by 3.6% in March to $436,700, which is 33.4% higher than last year.