New Home Sales Rise, Supported by Limited Existing Inventory

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 newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales is up 3.3% from 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 NAHB Chairman Bill Owens, 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."

"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's 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."

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: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the March reading of 682,000 units is the number of homes that would sell if this pace continued for the next 12 months.

New single-family home inventory in March fell to 481,000 units, down 0.4% compared to the previous month, and 4.6% lower than a year earlier. This represents an 8.5 months' supply at the current building pace.

The median new home sale price was $387,400, down 6.2% from a year ago, and down 9.7% from the recent peak of $429,100 reached in Dec 2025. Completed, ready-to-occupy inventory accounted for 119,000 homes in March, up 5.3% from a year ago.

Regionally, on a year-to-date basis, new home sales are up 8.0% in the Midwest. New home sales are down 17.6% in the Northeast, 2.6% in the South and 14.0% in the West.