New Homes Are in High Demand This Spring

New estimates from the U.S. Census Bureau and the Department of Housing and Urban Development show new home sales at an 8-month high in March. Sales were 5.8 percent above February’s rate and 15.6 percent higher than at the same time last year. The March results were the second-best reading since 2008 and easily surpassed economists’ expectations.

That’s encouraging news for the start of the spring season and could help boost the number of new homes that get built this year. And, at a time when inventory is low, that’s important. As more new homes are built there will be more options available for buyers, which will help balance the market and moderate price increases.

That’s why new home construction is a closely watched indicator of the health of the overall housing market. In other words, whether you’re in the market for a new home or not, the new home market will have an effect on your home search. Also in the report, the median sales price of new homes sold in March was $315,000, which is a jump from the month before but only 1.2 percent above one year ago. At the current sales pace, there was a 5.2-month supply of new homes available for sale at the end of the month.

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