ARLINGTON, Va.—New-home sales boomed 20.7% in March—from February’s upwardly revised rate of 846,000 annualized units to 1,021,000 units during the month—the highest level since August 2006.
The overall numbers are far more robust than the sales figures for existing home sales only, which as CUToday.info reported here, fell 3.7%. But all of the figures currently being reported are being affected by the pandemic’s effects on the economy.
"Pent-up demand from February storms was unleashed in March, which was most pronounced in the Southern region where sales rose 40.2%. Year-over-year numbers were striking, but the next few months will be skewed by the COVID-19 lockdowns last year,” said Curt Long, NAFCU’s chief economist and vice president of research.
‘Detrimental Effect’
"Homes listed for sale remained stable, but higher sales meant a reduction in months of supply. Rising mortgage rates will also have a detrimental effect on sales. On the upside, housing starts rose by 19.4% in March while permits rose by 2.3%. Homebuilder confidence also rose in April, but it is down from the all-time high set in November. Shortages in lumber and labor will prove challenging for homebuilders, though," he added. "NAFCU expects new home sales to continue their strong streak amidst tight supply through the rest of 2021."
Sales rose in all but one region in March, with the South rising 40.2% followed by the Midwest (+30.7%), and the Northeast (+20%). The West fell 30%. Compared to a year ago, sales rose in three regions; however, the numbers are skewed by the collapse of housing sales this time last year in response to the coronavirus pandemic lockdowns.
Moving Fast
Based on current month sales, there were 3.6 months of supply in March, down 0.8 months from February. The number of unsold homes left on the market was flat at 307,000 units representing a 7% drop from year-ago inventory levels.
The median new-home price, non-seasonally adjusted, declined from $345,900 in February to $330,800 in March.