New data from the U.S. Census Bureau shows a jump in new-home sales as existing-home inventory continues to be in short supply.
Sales of newly constructed homes jumped during April, new data shows.
Sales of newly built homes were at a seasonally adjusted annual estimate of 683,000 during April, according to data released Tuesday by the U.S. Census Bureau — 4.1 percent above the March 2023 rate of 656,000 and 11.8 percent above the April 2022 estimate of 611,000.
The increase in sales of newly built homes was the largest jump in 13 months, coming as buyers contend with a long-running inventory shortage in existing homes. This has been exacerbated over the past year by high mortage interest rates, leaving many would-be sellers reluctant to list their homes and give up their existing low rates.
Newly built homes offer a welcome source of new inventory for a market wrought with affordability challenges, economists explained.
“Homebuilders are fitting nicely into this spring housing season that is starved for new inventory,” Zillow Senior Economist Nicole Bachaud said in a statement. “Homebuyers are hungry for anything they can afford, and homebuilders are happy to meet them where they are.”
Spring homebuyers have benefitted from a backlog of new construction projects coming online that were started during 2022. Builders — angling to offload inventory — have been more willing to offer concessions, according to Bachaud.
“The backlog of new construction homes started in the last year or so is making its way online, and most builders and projects are offering some incentives to offset affordability constraints,” she said. “This is helping to bump up new-home sales at a time when existing-home sales are sliding.”
Inventory of new single-family homes increased 0.2 percent during April and remained elevated at a 7.6-month supply at the current bulding rate, with any measure near a six-month supply considered balanced, according to the National Association of Home Builders.
The median new-home sale price fell to $420,800 during April — 8 percent lower than it was a year ago.
The Census Bureau report showed a growth in sales in the lower price range of houses, with 9,000 sales in the $200,000 to $299,999 price range in April 2023, compared to just 4,000 sales in the year prior.
The $300,000 to $399,999 price bracket similarly grew by 14,000 sales over the same period.