New home sales in March were at a seasonally adjusted annual rate of about 621,000, an increase of 5.8% compared with a revised rate of about 587,000 in February and an increase of 15.6% compared with about 537,000 in March 2016, according to figures released by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
It was the third straight month that new home sales increased on a month-over-month basis.
The median sales price of new homes sold in March was $315,100. The average sales price was $388,200.
As of the end of March, there were about 268,000 new homes available for sale in the U.S. – about a 5.2-month supply at the current sales rate.
“This month’s increase in new home sales is aligned with solid builder confidence and shows that the spring home buying season is off to a strong start,” says Granger MacDonald, chairman of the National Association of Home Builders (NAHB), in a statement. “However, builders are concerned that ongoing increases in building material costs will hurt housing affordability, especially given [Wednesday’s] proposal by the Department of Commerce to impose a hefty tariff on Canadian lumber.”
“The March sales numbers are the second highest on record since the Great Recession, which is especially encouraging considering the poor weather conditions throughout many parts of the country,” adds Robert Dietz, chief economist for NAHB. “With tight existing-home inventory, rising household formations and continued job creation, we can expect further growth in new home sales moving forward.”
Regionally, new home sales increased 25.8% in the Northeast, 16.7% in the West and 1.6% in the South. Sales fell 4.5% in the Midwest.