US new-home sales climbed 4.5% in March

FILE - In this Feb. 21, 2019, file photo a sign is posted near a newly constructed home in Natick, Mass. On Tuesday, April 23, the Commerce Department reports on sales of new homes in March. (AP Photo/Steven Senne, File)

WASHINGTON — Sales of new U.S. homes increased 4.5% in March, the third straight monthly gain as the housing market appears to be cautiously recovering from a mortgage rate spike last year that caused homebuying to slump.

The Commerce Department said Tuesday that new homes sold at a seasonally adjusted annual rate of 692,000 in March, up from 662,000 in February. For the first three months of 2019, new-home sales were 1.7% higher than the same period a year ago.

March's sales pace was the strongest since November 2017, a sign that the market for newer properties is building some momentum. New-home sales began to rebound after the average 30-year mortgage rate fell from its recent peak of nearly 5% in November 2018.

"Homebuilders continue to indicate encouraging orders and traffic trends, crediting the drop in mortgage rates with re-energizing housing demand," said Stephen Stanley, chief economist at Amherst Pierpont Securities. "The next 2-3 months will be critical, as the spring selling season will be a telling test of whether housing demand is truly firming."

Yet the housing market has been uneven in recent months, a sign that years of price gains have hurt affordability and that lower mortgage rates can only remove a degree of the pressure from higher costs. Sales of existing homes — which make up the bulk of purchases — plunged 4.9% in March, the National Association of Realtors said Monday.

The median sales price of a new home in February tumbled 9.7% to $302,700.

Price pressures are creating a search for more affordable options.

In March, 16% of new-homes were sold for less than $200,000. This was marked increase from 2018, when just 12% of new homes sold for less than $200,000. Still, monthly sales figures can be volatile and the industry's preference for more profitable homes at higher prices could cause that share to dip in the coming months.

Must Read

With father in tow, Kaine seeks support from...

Aug 23, 2016

Tasked with shoring up union support for Hillary Clinton, running mate Tim Kaine turned Monday to...

US new-home sales climb to best level since late...

Aug 23, 2016

US sales of new homes soared 12.4 percent in July to best level since October 2007

The hidden risk to the economy in corporate...

Aug 24, 2016

America has a debt problem, and the big borrower this time may surprise you: Corporate America

The Latest: Trump calls Clinton 'bigot' who only...

Aug 25, 2016

Donald Trump is declaring that Hillary Clinton 'is a bigot' in his latest outreach to minority...

WHY IT MATTERS: Trade

Aug 25, 2016

In this angry election year, many Americans are deeply skeptical about free trade, it not downright...

Sign up now!

About Us

In The Headline sought to bring professionalism back into journalism, bringing you only the most exclusive and the most impactive news from all over the globe.

Contact us: sales[at]intheheadline.com