New home sales reversed direction in March, fully recovering from the 18.2 percent nosedive those sales took in February. The Census Bureau said sales of newly constructed homes rose 20.7 percent to a seasonally adjusted annual rate of 1.021 million units. This is 66.8 percent higher than the sales 612,000 unit pace in March 2020, although that rate was impacted by the pandemic shutdowns and was the highest annual sales rate since 2005.
February’s loss was also smaller than originally reported. Those sales were revised from 775,000 to 846,000 units.
Analysts’ estimates fell far short of the numbers reported. Those polled by Econoday had projected sales in a range of 820,000 to 950,000. The consensus was 887,000.
On a non-adjusted basis there were 97,000 new homes sold during the month, up from 70,000 the previous month. For the year to date sales have totaled 243,000 homes, a 34.4 percent increase over the 181,000 sales in the first three months of 2020.
The median price of a home sold in March was $330,800 and the average price was $397,800. In March 2020, the respective sales prices were $328,200 and $375,400.
At the end of the reporting period there were an estimated 307,000 new homes available for sale, identical to the inventory in February. However, due to the higher rate of sales this was estimated at a 3.6 month supply, down from 4.4 months in February. In March 2020, the supply was over 6 months.
Sales increased by double digits month over month in three of the four major regions but fell by double digits in the West where they were also down on an annual basis. The increase in the Northeast was 20 percent compared to February and 108.7 percent higher than the prior March. Sales in the Midwest rose 30.7 percent and 78.4 percent for the two periods.
The South posted a 40.2 percent gain for the month and 90.1 percent year-over-year. Sales in the West, which also posted poor March numbers for existing home sales, were down 30.0 percent from the prior month and dipped 2.0 percent from the year earlier level.