Sales of new US single-family homes rebounded in March from February’s downwardly revised level, drawing support from a persistent shortage of previously owned houses on the market, but momentum could be curbed by a resurgence in mortgage rates.
The report from the Commerce Department yesterday also showed the median house price jumped to a seven month-high from February, likely as fewer builders offered price cuts and sales shifted to higher priced homes. Rising prices and mortgage rates could make housing even more unaffordable, especially for first-time buyers.
“New home sales have remained remarkably strong recently,” said Oliver Allen, senior US economist at Pantheon Macroeconomics. “That said, the renewed rise in mortgage rates and dip in mortgage applications over the past couple of months means that new home sales will probably tread water at best in the near-term, while existing home sales will fall.”
New home sales jumped 8.8 per cent to a seasonally adjusted annual rate of 693,000 units last month, the highest level since September, the Commerce Department’s Census Bureau said. The sales pace for February was revised down to 637,000 units from the previously reported 662,000 units.
Economists polled by Reuters had forecast new home sales, which account for about 14pc of US home sales, would advance by a rate of 670,000 units.