A median-priced new home in the U.S. is roughly $77,000 more expensive than it was a year ago


The numbers: New home sales in the United States fell 8.6% to an annual rate of 763,000 in March, the government said on Tuesday. This figure represents the number of homes that would be sold over a one-year period if the same number of properties were purchased each month based on the March sales rate.

Compared to a year ago, sales were down 12.6%. MarketWatch economists expected new home sales in March to fall at an annual rate of 770,000.

The U.S. Census Bureau’s new home sales report, unlike the National Association of Realtors ’existing home sales report, reflects the sales where the contract is signed but the transaction has not yet been closed. Also, the small sample size of the report means that it can be quite volatile and prone to large revisions. In particular, the February sales pace was revised much higher to 835,000.

Key details: There were 407,000 new homes on sale at the end of March, 33% more than a year earlier and almost 4% over the previous month. This equates to a 6.4-month supply of new housing, roughly in line with the level of supply that is considered indicative of a balanced market.

The average sale price of a new home in March was $ 436,700, which is about $ 77,000 more expensive than the average price in March 2021.

The big picture: New home sales data are extremely volatile, as evidenced by the major revision in the February figures. However, it seems that the trend is following the change in the number of mortgage applications.

The Federal Reserve’s efforts to curb high inflation have resulted in an increase in mortgage rates, and rising rates appear to have reduced demand for home purchase to the extent that many households cannot. allow the luxury of buying properties.

“Markets and comments will draw a line from housing to the rest of the economy, and talking about the risk of recession, which has already risen sharply over the last two months, will increase exponentially,” Ian Shepherdson wrote. chief economist at Pantheon Macroeconomics. in a research note.

Looking ahead: “Builders are trying to increase entry supply by less than $ 300,000, but are still lagging behind last year, which means new homes are likely to be a viable option for fewer homebuyers. housing for the first time, “said Danielle Hale, chief economist at Realtor. .how.

Market reaction: The Dow Jones Industrial Average DJIA,
-2.77%
and the S&P 500 SPX Index
-3.63%
both fell in Tuesday morning’s operations, while major stock builders like DR Horton DHI,
-4.49%,
Lennar Corp. LEN,
-2.67%
and PulteGroup PHM,
-4.04%
saw gains in the morning trade.



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