Sales of newly built single-family homes increased for the third consecutive month, posting a strong showing to the spring selling season, the Commerce Department reported Tuesday. Single-family new-home sales rose 5.8 percent in March to a seasonally adjusted annual rate of 621,000 units.
“The March sales numbers are the second highest on record since the Great Recession, which is especially encouraging considering the poor weather conditions throughout many parts of the country,” says Robert Dietz, chief economist of the National Association of Home Builders. “With tight existing-home inventory, rising household formations, and continued job creation, we can expect further growth in new-home sales moving forward.”
In March, the inventory of new homes for sale was 268,000, a 5.2-month supply at the current sales pace, the Commerce Department reports. The median price of a new home sold in March was $315,100.
The region that saw the strongest uptick in new-home sales last month was the Northeast, rising 25.8 percent month over month, followed by a 16.7 percent gain in the West and a 1.6 percent increase in the South. The Midwest was the only major region of the U.S. to see a drop in sales, falling 4.5 percent month over month.
“This month’s increase in new-home sales is aligned with solid builder confidence and shows that the spring homebuying season is off to a strong start,” says Granger MacDonald, NAHB chairman. “However, builders are concerned that ongoing increases in building material costs will hurt housing affordability.”
MacDonald says the association is concerned about an announcement this week from the U.S. Commerce Department proposing a 20 percent countervailing duty on Canadian lumber imports. Thirty-three percent of the lumber used in the U.S. last year was imported with the bulk of it coming from Canada, the NAHB reports. It takes about 15,000 feet of board to build a standard single-family home. The lumber price increase in the first quarter of this year has added nearly $3,600 to the price of a new home, the NAHB reports.