After what was arguably the dreariest winter on record for new-home builders, spring has brought some good news: New-home sales were up 11.1% in March from the month before, and the median price of a new home improved 5.8% to $213,800, according to numbers released today by the Census Bureau and HUD.
But as bright as all that sounds, after February’s numbers—the lowest on record for new-home sales—you might say there was nowhere to go but up. On a year-over-year basis, home sales remain down 21.9%, and for the past 10 months sales have bounced along the bottom, since the demise of the home-buyer tax credit.
The month-to-month regional data emphasize how fickle the numbers can be. While the Northeast experienced the greatest loss in new-home sales in February with a decline of 57.1%, the region saw the largest gains in March, with a sales increase of 66.7%.
And while the South dropped less than any other region in February, in March it was the only region to experience a decline, down 0.6%.
As for the improvement in pricing, it is yet to be seen as to whether or not the upward movement is here to stay.
“It is very, very difficult to say whether these statistics represent a trend,” Nigel Gault, chief U.S. economist at IHS Global Insight, told Builder. “The price can vary a lot from month to month,” Gault cautioned, because the mix of homes sold can be so volatile.
“I certainly don’t think that in the current environment, where sales are extremely low and new homes are competing with a large number of existing homes … especially with many in distress, that this is an indication of builders moving prices upward,” he said.
However, Gault does see an upward trend on the horizon. While March’s current pace puts new-home sales at an annual rate of 300,000 units, Gault expects the year’s total to reach 326,000.
Claire Easley is senior editor, online, at Builder.
Learn more about markets featured in this article: Greenville, SC.
