New-home sales jumped in March and surpassed consensus expectations, despite high interest rates and other headwinds. 

Specifically, new-home sales rose 7.4% month over month to a seasonally adjusted annual rate of 724,000 residences, compared to 674,000 homes in February, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.   

The consensus estimate was for an annual rate of 680,000 transactions.   

Year over year, sales were up 6% from the March 2024 rate of 683,000.     

“Despite the stubborn elevated mortgage rates, new home sales rose 7% in March from a month ago and are up 6% from a year ago,” National Association of REALTORS® Chief Economist Lawrence Yun said. “A wide inventory availability — at eight months supply — is helping newly constructed home sales to move forward.” 

The median sales price for a new home was $403,600, down 1.9% from the February price of $411,500 and 7.5% below the March 2024 price of $436,400.    

The decline comes as homebuilders are focusing on smaller-sized homes, a move that is attracting buyers, Yun added. 

Months’ supply of new homes for sale in March slumped 6.7% to 8.3 months from 8.9 months in February. Year over year, supply was up 1.2% compared to March 2024, when it was at 8.2 months.  

Yun noted the slow pace of existing-home sales, which has bedeviled the market for the past two years as homeowners remained in their homes due to high interest rates. 

“[T]he passage of time should bring about more inventory as life-changing events force some homeowners to give up their locked-in low mortgage rates,” he said.