Loading articles...

US sales of new homes shot up 4 per cent in March

Last Updated Apr 24, 2018 at 12:20 pm EDT

WASHINGTON – Sales of new U.S. homes jumped 4 per cent in March, propelled by a surge of buying in the West.

The Commerce Department said Tuesday that sales last month were at a seasonally adjusted annual rate of 694,000. The two prior months had their sales revised upward with the annual rate being 667,000 in February and 644,000 in January. For the first three months of 2018, sales are running 10.3 per cent higher than a year ago.

Homebuyers are snapping up newly built houses as the economic outlook has continued to improve in recent months. Nor have the gains been derailed so far by 30-year mortgage rates climbing to their highest averages since early 2014.

Still, the solid sales growth for new homes also shows that many would-be buyers can’t find existing homes that are available to purchase. Listings for existing homes sank to the lowest levels on record for March, the National Association of Realtors reported on Monday.

New homes tend to cost more than older properties. The median sales price of a new home rose 4.8 per cent from a year ago to $337,200, a nearly $87,000 premium on the median cost of an existing home.

Prices for a new home are increasingly concentrated at higher price points. In 2016, 53 per cent of new homes cost more than $300,000. That figure climbed to 60 per cent for new homes sold in March.

The March increase was driven almost entirely by a 28.3 per cent leap in sales in the West. New-home purchases rose slightly in the South, fell in the Midwest and plunged in the Northeast. The new home sales report can be volatile on a monthly basis, causing the numbers to be revised later.