Sales of new single-family homes in the United States surged to their highest level in a year in March, with a nearly 10% increase in purchases compared to the previous month.
On Tuesday, the Commerce Department reported 683,000 new sales of single-family homes in March, a significant increase from the revised 623,000 sales in February. This news suggests that the national housing market may be stabilizing after a recent decline in mortgage rates. The March figures exceeded economists’ expectations, with Reuters’ poll predicting new home sales to reach only around 630,000 for the month.
In March, homebuyers enjoyed lower mortgage expenses due to a decline in the average rate on the 30-year mortgage, as reported by Freddie Mac. This was a welcome change from the end of 2022, when the rate had reached a peak of just above 7%.
Although the US housing market has faced significant challenges due to the Federal Reserve’s aggressive interest rate hikes in recent months, there are indications that the situation may be improving. This includes consecutive monthly growth in single-family housing starts and a gradual improvement in the confidence of homebuilders.
March’s overall sales growth was largely propelled by a significant surge in activity in the Northeast, with the region reporting a massive 170.8% increase in sales activity. In contrast, the West and Midwest recorded lower increases, at 29.8% and 6.0%, respectively.
The Northeast’s impressive sales growth could be attributed to a combination of factors, including a higher demand for homes due to limited inventory and a desire for more space in the wake of the pandemic. Additionally, the Northeast region has been experiencing population growth as more people move to suburban and rural areas outside of major cities like New York and Boston.
Overall, the positive news regarding new home sales in March is a welcome sign for the US housing market, which has faced several challenges in recent months. While it is still too early to determine whether the market has fully recovered, the consecutive monthly increases in single-family housing starts and improving homebuilder confidence suggest that the worst may be behind us.