Washington, D.C.—Constrained supply of existing homes and modest improvement in mortgage rates pushed new home sales higher in March.
Sales of newly built single-family homes rose 7.4% in March to a seasonally adjusted annual rate of 682,000, according to data released by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales increased 3.3% compared to a year earlier.
“An uptick in new home sales reflects improving demand conditions, supported by a modest pullback in mortgage rates and ongoing supply constraints in the existing home market,” said Bill Owens, chairman of the National Association of Home Builders and a home builder and remodeler from Worthington, Ohio. “Builders are gradually increasing production, but elevated construction costs and labor shortages continue to limit the pace of expansion.”
A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction, including not yet started, under construction or completed. The March reading of 682,000 units reflects the number of homes that would sell if the current pace continued for the next 12 months.
“Looking ahead, the rise in new home sales points to a modest strengthening in residential construction activity in the near term,” said Danushka Nanayakkara-Skillington, NAHB assistant vice president for forecasting and analysis. “However, the outlook remains sensitive to interest rate movements and affordability conditions, which will ultimately determine the sustainability of this momentum.”
Inventory and pricing shift
New single-family home inventory in March fell to 481,000 units. That figure was down 0.4% from the previous month and 4.6% lower than a year earlier. The inventory level represents an 8.5-month supply at the current building pace.
The median new home sale price reached $387,400 in March. That was down 6.2% from a year ago and 9.7% below the recent peak of $429,100 recorded in December 2025.
Completed and ready-to-occupy inventory accounted for 119,000 homes in March, up 5.3% from a year ago.
Regional activity remains mixed
On a year-to-date basis, new home sales increased 8% in the Midwest. Sales declined 17.6% in the Northeast, 2.6% in the South and 14% in the West.