US new-home sales climbed 4.5% in March

WASHINGTON — Sales of new U.S. homes increased 4.5% in March, the third straight monthly gain as the housing market appears to be cautiously recovering from a mortgage rate spike last year that caused homebuying to slump.

The Commerce Department said Tuesday that new homes sold at a seasonally adjusted annual rate of 692,000 in March, up from 662,000 in February. For the first three months of 2019, new-home sales were 1.7% higher than the same period a year ago.

March's sales pace was the strongest since November 2017, a sign that the market for newer properties is building some momentum. New-home sales began to rebound after the average 30-year mortgage rate fell from its recent peak of nearly 5% in November 2018.

"Homebuilders continue to indicate encouraging orders and traffic trends, crediting the drop in mortgage rates with re-energizing housing demand," said Stephen Stanley, chief economist at Amherst Pierpont Securities. "The next 2-3 months will be critical, as the spring selling season will be a telling test of whether housing demand is truly firming."

Yet the housing market has been uneven in recent months, a sign that years of price gains have hurt affordability and that lower mortgage rates can only remove a degree of the pressure from higher costs. Sales of existing homes — which make up the bulk of purchases — plunged 4.9% in March, the National Association of Realtors said Monday.

The median sales price of a new home in February tumbled 9.7% to $302,700.

Price pressures are creating a search for more affordable options.

In March, 16% of new-homes were sold for less than $200,000. This was marked increase from 2018, when just 12% of new homes sold for less than $200,000. Still, monthly sales figures can be volatile and the industry's preference for more profitable homes at higher prices could cause that share to dip in the coming months.

Must Read

Fidel Castro thanks Cuba, criticizes Obama, on 90th birthday

Aug 14, 2016

Fidel Castro thanked Cubans for their well-wishes on his 90th birthday and criticized President Barack Obama in a lengthy letter published in state media

UK manufacturers see costs jump in wake of Brexit vote

Aug 16, 2016

Official figures show consumer prices in Britain rose more than expected in July, while the cost of raw materials for manufacturers are mounting as a result of the pound's drop in the wake of the vote to leave the European Union

She said yes: Claye proposes after taking Olympic silver

Aug 16, 2016

She said yes: Claye proposes after taking Olympic silver

Search

Obserworld delivers the most accurate and up-to-date world news for the global audience with a thorough research and in-depth interviews. Discover the world through Obserworld.

Contact us: sales[at]obserworld.com