Residential Real Estate News
U.S. New Home Sales Uptick in March
The National Association of Home Builders reports that a slight dip in mortgage rates and limited existing home inventory helped drive an increase in new home sales across the U.S. in March 2025, despite ongoing market uncertainty facing both builders and buyers.
According to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, sales of newly constructed single-family homes rose by 7.4% in March, reaching a seasonally adjusted annual rate of 724,000 units--up from a revised January figure. This marks a 6.0% increase compared to March 2024.
"The latest data shows that buyer demand remains solid as long as affordability conditions make homeownership viable," said Buddy Hughes, NAHB chairman. "Greater economic stability would go a long way in strengthening future sales momentum."
"Declining mortgage rates were a key factor in March's sales boost," added NAHB Chief Economist Robert Dietz. "The average 30-year fixed mortgage rate fell from 6.84% in February to 6.65% in March."
A new home sale is recorded when a purchase agreement is signed or a deposit is made, regardless of construction status. The March figure, adjusted for seasonal trends, reflects the annualized pace if sales continued at the same rate for the next year.
Inventory of new single-family homes climbed to 503,000 in March--an increase of 7.9% year-over-year. This equates to an 8.3-month supply at the current sales pace, a relatively balanced level considering the existing home market remains tight with just 3.4 months of supply. The number of completed, move-in-ready homes rose to 119,000, up 34% from a year earlier.
The median price of a new home in March was $403,600, down 7.5% from the previous year. Sales were particularly strong in the lower price ranges, with homes priced under $300,000 seeing a 33% increase year-over-year and those priced between $300,000 and $400,000 rising 28%.
Regionally, year-to-date new home sales surged 12.9% in the South, while declining by 32% in the Northeast, 18.3% in the Midwest, and 6% in the West.
The National Association of Realtors chief economist Lawrence Yun commented, "Despite the stubborn elevated mortgage rates, new home sales rose 7% in March from a month ago and are up 6% from a year ago. A wide inventory availability - at 8 months supply - is helping newly constructed home sales to move forward. The homebuilders' focus on smaller-sized homes is also attracting buyers. The median price of newly constructed homes was $403,600, well below the $435,000 price from three years ago when builders were constructing larger-sized homes. The latest monthly gain is on top of annual gains of the past two years for homebuilders.:
Yun further stated, "Meanwhile, existing homeowner home sales have struggled the past two years due to historic low inventory levels. But the passage of time should bring about more inventory as life-changing events force some homeowners to give up their locked-in low mortgage rates. Mortgage applications to purchase homes are up 4.3% year-to-date, even though an application does not mean an approval or decision to enter the market. Aside from inventory growth, lower mortgage rates will be needed to get homeowners to move."
