New home sales in the United States grew more than anticipated in March, the Commerce Department said Tuesday, as a lack of existing homes continued bolstering demand in the market for new properties.
Sales of new single-family houses picked up 9.6 percent to an annual rate of 683,000 last month, seasonally adjusted, said the department.
The increase exceeded analyst forecasts, suggesting the market remains hotter than expected, while February’s rate was revised down to 623,000.
The trend in new home sales has “massively outperformed” the level implied by mortgage demand since mid-2022, said Ian Shepherdson and Kieran Clancy of Pantheon Macroeconomics in a recent note.
“That, in turn, reflects the relative abundance of new home supply,” the economists added
The supply of new homes for sale could last a little over eight months, significantly more than trends in the existing home market, they said.
New home sales in March remain 3.4 percent below than the same period a year ago, the Commerce Department said.
The median sales price of new houses sold in March was $449,800, up from February.
The property sector — which is sensitive to interest rates — has been reeling as the Federal Reserve rapidly raised the benchmark lending rate rapidly since early 2022 to tackle high inflation.
The new homes market is much smaller than that of existing homes in the country.
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