The sale of new detached houses increased to the highest level in six months across the country in March.
The yearly rate of detached home sales in the U.S. was 693,000 in March, which is 8.8% higher than in February and 8.3% above the same month in 2023, according to joint estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development which came out on Tuesday.
Despite strong home sales in 2024, Oliver Allen, a senior U.S. economist at Pantheon Macroeconomics, predicts slower home purchasing activity in the following months due to a rise in mortgage rates and a decrease in mortgage applications in March.
“New home sales have recently remained very strong,” Allen told Reuters. “However, with the renewed increase in mortgage rates and decline in mortgage applications, it is likely that new home sales will only remain steady at best.”
Based on March estimates, the median and average sales prices for a new detached home in the U.S. were $430,700 and $524,800, respectively, or roughly 4.4% and 7.1% pricier than the same time in 2023. At the end of March, there were 477,000 new detached homes for sale across the country, which is around 8.3 months’ worth of supply at the current sales rate.
As The Dallas Express previously reported, U.S. mortgage rates climbed to 7.50% in April, reaching the highest level since November 2023.
Even with increasing home prices and rising mortgage rates, there was not enough pressure to deter homebuyers or slow down activity during the month, according to Gregg Logan, managing director at RCLCO Real Estate Consulting.
Logan explained that major homebuilders have been willing to offer incentives such as price reductions, mortgage rate buy-downs, and paying closing costs to help maintain the pace of new home sales in the U.S.
“As rates decrease later this year we expect that trend to continue,” he said, per U.S. News.
