The months’ supply number improved to 6.0, which indicates the market is stabilizing after the fall off in sales last Fall due to higher interest rates. The return to the long-run trend for sales and recent declines in mortgage interest rates (now around 4.2%) suggest demand is available when housing affordability conditions improve.
For the first quarter of 2019, new home sales are running 1.7% higher than the first quarter of 2018. However, while sales were up 9.6% for the quarter in the South (the largest region), sales were down 5.9% in the West, 8.1% in the Midwest and 17.6% in the Northeast.
The March data reveal the challenge of housing affordability however. March sales grew at lower price points. For example, 50% of March 2019 new home sales were priced under $300,000. In March of 2018, only 39% of sales were priced under $300,000.
The median new home sales price in March was estimated to be $302,700. This is down from a year ago when the median was $335,400.
After increasing from August to December, new home inventory has stabilized between 340,000 and 350,000 in recent months. This does mark a gain on a year-over-year basis from March 2018 when inventory stood at 297,000. The current months’ supply number has fallen from 7.4 in December 2018 to a more normalized 6.0 in March.