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The spring selling season of 2024 continued at a stronger pace than 2023, according to data from Zonda. Zonda estimates 695,337 new homes were sold in March on a seasonally adjusted annualized rate, a 4.9% increase compared with March 2023. On a nonseasonally adjusted basis, 65,875 homes were sold in March, 5.7% higher than last year and 18.3% above March 2019.

On a seasonally adjusted annualized basis, the rate of new-home sales in March was 7% slower than in February, according to Zonda’s latest New Home Market Update.

Despite stronger sales figures on a year-over-year basis, the housing market continues to face challenges, including elevated inflation and strong employment that will likely keep mortgage interest rates elevated in the short term.

“We are in a housing market today where people don’t have to move,” says Ali Wolf, chief economist for Zonda. “Existing homeowners are perfectly content staying put with their low interest rates, and many renters have decided to stay put in place until there is more. This means the market relies heavily on ‘life happens’ buyers—those driven by life events like marriage, divorce, children, or retirement.”

Zonda’s New Home Pending Sales Index (PSI), which accounts for fluctuations in supply by combining total sales volume with the average sales rate per month per community, came in with a reading of 142.1 in March, up 3.1% year over year. The reading of 142.1 is 3.1% lower than in February and remains 18.4% below cycle highs.

The markets that reported the strongest PSI relative to last year were Phoenix (+34.6%), Baltimore (+18.4%), and Tampa, Florida (+16.3%). March sales in the three markets were up 21%, 19%, and 65% compared with 2019, respectively. Twelve metros posted year-over-year declines in PSI, including Los Angeles/Orange County (-15.1%), Jacksonville, Florida (-12.3%), Salt Lake City (-10.6%), Denver (-10.4%), and Orlando, Florida (-10.3%).

On a monthly basis, Las Vegas, New York, and Salt Lake City performed the best in terms of PSI, according to Zonda.

The Zonda Market Ranking (ZMR)—which accounts for sales pace and volume, is seasonally adjusted and is taken as a percentage relative to a baseline market average—indicated the national housing market was slightly overperforming with a reading of 112.7 in March. The ZMR does not account for what it takes to sell a home; securing a sale may still feel difficult in a significantly overperforming market, according to Zonda.

Builders surveyed by Zonda indicated demand was in line with expectations, with housing affordability and prospective buyers sitting on the sideline remaining top concerns for builders.

Zonda’s snapshot markets were split: 40% were slightly overperforming, 40% were average, and 20% were slightly underperforming in March. Among Zonda’s top 50 major markets, 62% were overperforming, according to the ZMR.

According to Zonda, home prices decreased year over year across all three product categories: Entry-level prices fell 1.9% to $331,436 on average; move-up prices decreased 0.8% to $521,040; and high-end home prices declined 0.4% to $906,358. Approximately 51% of builders surveyed by Zonda reported raising prices in March, while 44% reported holding prices flat in the month.

Incentives remain common for builders: 58% of new-home communities across the country offered incentives in March, an increase from 57% in February.

There are 14,555 actively selling communities tracked by Zonda, up 3.2% from last month. On a year-over-year basis, community count fell 2.1%. Total community count—defined by Zonda as anywhere where five units or more are for sale—is 24.7% below the same month in 2019.

Dallas (+13.4%), Austin, Texas (+11.9%), and Salt Lake City (+9.6%) grew community count the most on a year-over-year basis. The biggest community count declines relative to last year were in San Francisco (-22.6%), Philadelphia (-19.4%), and Cincinnati (-14.6%).

National quick move-ins (QMIs)—homes that can likely be occupied within 90 days—totaled 26,533 in March, down 5.9% compared with last year and 7.3% compared with February levels. Total QMIs remain 41.7% above 2019 levels.

Approximately 28% of Zonda’s select markets increased QMI count year over year, led by California's Riverside/San Bernardino (+38.6%), Cincinnati (+32.5%), and Dallas (+24.6%). Jacksonville, Florida; Sacramento, California; and San Antonio have seen the most growth in QMIs compared with 2019, with each metro posting increases of at least 144%.

QMIs are down the most compared to 2019 in Seattle (-65%), San Francisco (-61%), and Baltimore (-50%).

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