The rollercoaster that is new home sales is back on the upswing in a rather dramatic manner.
After falling in February by more than 18% from January’s figures, new home sales bounced back big-time in March. According to new data from the Census Bureau and the Department of Housing and Urban Development, new home sales were up 20.7% in March over February’s total.
It’s a dramatic reversal from February, when new home sales fell by 18.2% from January.
And it wasn’t just that March saw a sizable flip-flop from February. As it turns out, March was the best month for new home sales in more than 14 years.
Analysis from the National Association of Home Builders shows that in March, new homes sold at the fastest pace since September 2006.
March’s big sales figures are not a huge surprise, as recent data from the Mortgage Bankers Association showed that demand for new homes increased substantially in March, with mortgage applications for new homes rising in March by 12% over February.
The increase in demand and sales comes at a time when new home construction is also picking up, creating an environment that could sustain increased new home sales for some time.
However, as NAHB Chairman Chuck Fowke notes, lumber costs are still holding construction back somewhat.
“Our members are seeing strong buyer traffic as continued low mortgage rates are helping fuel sales,” Fowke said. “However, builders still grappling with major supply chain issues and soaring materials costs, which are causing construction delays and preventing them from adding to the already very low inventory.”
Broken down by region, analysis from the NAHB shows that new home sales are down 3.3% in the western part of the U.S. so far this year. However, new home sales are up big in the rest of the country: up 36.6% in the Northeast, 53.9% in the Midwest and 50.5% in the South.