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Economy in Brief

U.S. New Home Sales Fall for the Third Straight Month in March
by Winnie Tapasanun  April 26, 2022

• 763,000 units SAAR in March, a four-month low; upward revisions to February and January.

• Sales drops are widespread in all the major regions, especially in the South.

• Median sales price rebounds to a record high.

New single-family home sales fell 8.6% m/m (-12.6% y/y) to 763,000 units at an annual rate in March after drops of 1.2% to 835,000 in February (initially 772,000) and 3.0% to 845,000 in January (previously 788,000), according to the U.S. Census Bureau. The March level was the lowest since November. The Action Economics Forecast Survey expected 774,000 sales in March. Supply continues its revival as the number of new homes for sale rose to 407,000 in March, the highest level since August 2008, from 392,000 in February.

By region, sales in March fell in all the major regions. Sales in the South slid 10.2% (-24.7% y/y) to 414,000 at an annual rate after a 1.1% decline to 461,000, registering the third consecutive monthly slide to the lowest level since October. Sales in the Midwest dropped 8.7% (-13.8% y/y) to 94,000, reversing a 9.6% gain to 103,000. Sales in the West fell 6.0% (+21.0% y/y) to 202,000, the third straight m/m fall to a five-month low, after a 14.3% decrease to 215,000. Sales in the Northeast declined 5.4% (+12.8% y/y) to 53,000 after having recovered 64.7% to 56,000.

The median price of a new home rebounded 3.6% (21.4% y/y) to a record high $436,700 in March following a 2.2% decline to $421,600 in February. The average sales price of a new home increased 3.1% (26.3% y/y), the third successive m/m rise to a record high $523,900. These sales price data are not seasonally adjusted.

The seasonally adjusted supply of new homes for sale rose to 6.4 months in March, the highest since October, from 5.6 in February. The record low was 3.5 months in August, September and October of 2020. The median number of months a new home stayed on the market edged up to 3.0 months in March from 2.9 in February. The record low was October's 2.5 months These figures date back to January 1975.

New home sales activity and prices are available in Haver's USECON database. The consensus expectation figure from Action Economics is available in the AS1REPNA database.

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