Housing News

Homebuyers Seeking Deals Snap Up New Homes

Given that the prices for existing homes continue to rise, homebuyers are increasingly shifting their attention to new homes—which are hitting the market with lower price tags.

Sales of newly constructed homes jumped by 7.4% in March over February’s numbers, which were also elevated compared to January. That data is from the latest new residential sales report from the U.S. Census Bureau and U.S. Department of Housing and Urban Development.

The report also showed that new home sales in March were up 6% from the same month last year.

The increase appears to be driven by a combination of lower mortgage interest rates in March, an increase in new homes available for sale, and, most notably, declining prices.

The median sales price for a new home in March was $403,600. That’s down 1.9% from February and was 7.5% below the March 2024 level of $436,400.

What’s responsible for the increase in new home sales?

Much of the increase in sales was at lower price levels, according to the National Association of Home Builders.  

“Compared to March 2024, new homes sales were 33% higher for homes priced below $300,000 and 28% higher for new homes priced between $300,000 and $400,000,” NAHB Chief Economist Robert Dietz wrote in an article about the report.

The increase in sales was also mostly seen in the southern part of the U.S. New home sales were up by 22.3% year-over-year in the South.

This was compared to declines of 33.3% in the Northeast; 15.9% in the Midwest; and 12.2% in the West.

“Demand continues to be present in the market, provided affordability conditions permit a purchase,” Buddy Hughes, chairman of the NAHB, said in a statement. “An increase in economic certainty would be a big boost to future sales conditions.”