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U.S. New Home Sales Surge 7.4% in March, Exceeding Economist Estimates

Word on the StreetWednesday, Apr 23, 2025 11:07 am ET

1min read

In March, the United States witnessed a notable increase in new residential home sales, with the annualized rate rising by 7.4% to 724,000 units. This figure exceeded the predictions of 43 economists, who had estimated a range between 650,000 and 709,000 units. According to the Census Bureau, new home sales for the month surged by 50,000 units, marking a significant uptick in the housing market. However, the sales data for the first three months of the year was revised downward by 5,000 units, indicating some volatility in the early part of the year.

The median price of new homes experienced a year-over-year decline of 7.5%, settling at $403,600. This decrease in prices, combined with the increase in sales, suggests a shift in market dynamics. Factors such as lower mortgage rates or increased buyer confidence could be driving this change. The inventory of homes available for sale in March was sufficient to last 8.3 months, a slight improvement from the 8.9 months recorded in February. This reduction in inventory duration indicates a faster pace of sales, which could be attributed to heightened demand or a decrease in new construction starts.

The surge in new home sales was particularly pronounced in the southern region of the U.S., where sales saw a notable increase. This regional disparity highlights the varying market conditions across different parts of the country, with the South experiencing stronger demand compared to other regions. The robust performance in the South could be influenced by factors such as population growth, job opportunities, or favorable housing policies.

The increase in new home sales, despite the downward revision in earlier data, signals a positive trend in the housing market. The combination of rising sales and declining prices suggests that the market is becoming more accessible to potential buyers, which could further stimulate demand. However, the long-term sustainability of this trend will depend on various economic factors, including interest rates, employment levels, and overall economic growth. The housing market's performance in the coming months will be closely watched to see if this positive momentum continues.

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