The U.S. Census Bureau released their New Home Sales report, and it showed that signed contracts on newly constructed homes rebounded in March, up 8.8% after falling in February. Year-over-year they are up 8.3%. The shortage of existing home inventory for sale continues to be the main driver of demand for new construction even in a higher interest rate environment.
The National Association of Realtors released their Existing Home Sales report, and it showed that signed contracts on existing homes slipped 4.3% in March after hitting their highest level in a year in February. Sales are now down 3.7% from March 2023 to March 2024 but if there were more homes to be purchased there would be more sales. NAR’s Chief Economist, Lawrence Yun, confirmed sales are, “rebounding from cyclical lows.” The rise in first-time buyers and multiple offers also suggests demand remains ahead of the spring buying season even in the face of elevated mortgage rates.
The shortage of existing homes is garnering more interest in the new home sales market and even though sales for existing home sales dipped, it isn’t because of the lack of demand, but it is because of the lack of homes available.
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By: Jon Iacono