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Constrained supply of existing homes and modest improvement in mortgage rates pushed new home sales higher in March, according to the National Association of Home Builders.
The U.S. Department of Housing and Urban Development and the U.S. Census Bureau reported sales of newly built single-family homes rose 7.4% in March to a seasonally adjusted annual rate of 682,000. The pace of new home sales is up 3.3% from last year.
“An uptick in new home sales reflects improving demand conditions, supported by a modest pullback in mortgage rates and ongoing supply constraints in the existing home market,” says NAHB chairman Bill Owens, a homebuilder and remodeler from Worthington, Ohio. “Builders are gradually increasing production, but elevated construction costs and labor shortages continue to limit the pace of expansion.”
New single-family home inventory in March fell to 481,000 units, down 0.4% compared to the previous month, and 4.6% lower than a year earlier. This represents an 8.5 months’ supply at the current building pace.
“Looking ahead, the rise in new home sales points to a modest strengthening in residential construction activity in the near term,” says Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis. “However, the outlook remains sensitive to interest rate movements and affordability conditions, which will ultimately determine the sustainability of this momentum.”
The median new home sale price was $387,400, down 6.2% from a year ago and down 9.7% from the recent peak of $429,100 reached in December 2025. Completed, ready-to-occupy inventory accounted for 119,000 homes in March, up 5.3% from a year ago.
Regionally, on a year-to-date basis, new home sales are up 8.0% in the Midwest. New home sales are down 17.6% in the Northeast, 2.6% in the South and 14.0% in the West.
