New home sales surged in March, driven by a sharp increase in activity in the South, according to new data from the U.S. Census Bureau.
- The South recorded a seasonally adjusted annual rate of 483,000 new home sales, marking a 13.6% increase from February and the highest level since April 2021.
- The South now accounts for 66.7% of all new home sales nationwide, the largest share on record.
Nationally, new home sales rose to an annualized pace of 724,000 units in March, a 7.4% monthly gain and the strongest reading since September.
- Economists had expected sales to hold steady at 628,000, making this report a clear beat.
Mixed Month: Regionally, results were mixed. The Midwest joined the South in positive territory, posting a 3.0% increase. However, the Northeast saw a sharp 22.2% decline in sales, while the West slipped by 1.4%.
Inventory: Despite the national increase in transactions, total inventory also rose to 503,000 units, the highest level since November 2007. Yet with the pace of sales accelerating, the months’ supply of new homes declined to 8.3 months — the second-lowest figure in the past six months.
Bottom Line: This was a strong report for the housing market, particularly in the South where population growth and affordability continue to fuel demand. Still, April’s numbers will provide a clearer sense of how builders and buyers are coping with continued market volatility and rising input costs.
