US New Home Sales soar in March

Sales of new single-family homes in the US hit a high point last month, according to data released by the US Department of Commerce.

Sales of new single-family homes in the US hit a high point last month, according to data released by the US Department of Commerce. The news was greeted with optimism by many in the housing sector, who see it as a sign that the worst of the housing market's troubles may be over.

According to the data, seasonally adjusted annual new home sales rose 9.6% in March to 683,000 units. This was the highest level since March 2022, and followed a revision of February's sales figures to 623,000 units, down from 640,000 previously reported. However, year-over-year, new home sales fell 3.4% in March.

US New Home Sales soar in March

One of the reasons for the increase in sales can be attributed to falling mortgage rates, which boosted homebuyer demand. The average mortgage rate on a 30-year fixed loan in March was much lower than the peak of 7.03% at the end of 2022, according to data from mortgage lender Freddie Mac.

Despite the positive news, there are still challenges facing the housing market. Banks are tightening lending standards, making it difficult for homebuilders to access capital for new projects. Meanwhile, potential home buyers are finding it difficult to get loans to buy a home.

The average new home price in March increased 3.2% year-on-year to $449,800. As of the end of March, there were 432,000 new homes for sale on the market, down from 434,000 in February. At March's sales pace, it would take 7.6 months to sell off all homes listed on the market, down from February's 8.4 months.

Despite the challenges, some experts say the worst of the US housing market may be over. Builders' confidence continued to grow with the number of single-family homes starting construction increasing for the second consecutive month. Meanwhile, the number of future construction permits also rose to a 5-month high.

While the rise in new home sales is good news for the housing market, there are still challenges that need to be overcome. The tightening of lending standards by banks is making it difficult for homebuilders to access capital, while potential home buyers are finding it tough to get loans to buy a home. However, the fact that builders' confidence is growing, and the number of single-family homes starting construction is increasing, is a positive sign that the housing market may be on the road to recovery.