• There were 724,000 (SAAR) new single family home sales nationwide in March. That’s a 7.4% increase from the revised February rate of 674,000. Sales of newly built homes are 6.0% above the March 2024 estimate, according to the U.S. Census Bureau.
• The median price of new houses sold was $403,600, down 7.5% from a year ago.
• The seasonally-adjusted estimate of new houses for sale at the end of March was 503,000, a supply of 8.3 months at the current sales rate. This is down from 8.9 months in February and only barely higher than the 8.2 months in March 2024.

What happened: More widespread price cuts and lower mortgage rates are supporting new home sales. At the national level, the price per square foot of new construction homes is no longer rising according to Zillow data. New home sales increased where higher housing inventory has led to more price cuts, especially in the South, up 13.6% in March. 

Why it matters: Despite economic jitters and a cooling labor market, the spring housing market is more active than last year. Consumer confidence is falling, prompting some households to hesitate on big-ticket items like a home purchase. But lower mortgage rates compared to last year are helping to keep the momentum alive. 

With the pool of inventory refilling closer to typical levels, more builders are cutting their prices, just as existing home sellers are. This is giving buyers negotiating leverage and supporting home sales through this bumpy period for the economy. The size of those price cuts are smaller than last year, signaling they are strategic moves rather than desperate ones.

According to the National Association of Home Builders, more builders cut their prices in March – 29% of builders – compared to 24% in March 2024. However, the average price reduction in March remained at just 5%, lower than the 6% seen in March 2024. And the share of builders offering sales incentives has remained roughly unchanged. Roughly 59% of builders provided sales incentives of all forms in March, compared to 60% a year ago.

Housing demand is surprisingly stable given the macro headwinds, and unless rates spike again we expect 2025 to finish with more new home sales than last year.