U.S. new-home sales rise in March; median price at $387,400

The Census Bureau reported U.S. new-home sales rose 7.4% in March to a seasonally adjusted annual rate of 682,000, up from a revised 635,000 in February and 3.3% higher than a year earlier. The reading exceeded the forecast of 652,000.

The median price for a new home fell 5.3% month-to-month to $387,400, the lowest level in nearly five years. The median was down 6.2% from March of last year in nominal terms. After adjusting for inflation using the Consumer Price Index for urban consumers, the real median price declined 6.3% from February and 9.1% from a year earlier, reaching its lowest inflation-adjusted level since 2014.

Freddie Mac reported the average 30-year fixed mortgage rate in March at 6.18%. At that level, the “lock-in effect” can discourage homeowners with lower-rate loans from listing their properties, reducing available inventory.

Census mid-month population estimates show the U.S. population has grown about 82.1% since 1963. Expressing new single-family sales as a share of the population, the percentage peaked at 0.47% in July 2005 and hit a low of 0.09% in February 2011. Raw new single-family sales are about 15.4% higher than at the start of the 1963 series, while the population-adjusted measure is roughly 36.6% below that 1963 baseline.

Investors track exchange-traded funds tied to residential real estate and homebuilders, including iShares Residential and Multisector Real Estate ETF (REZ), Invesco Dynamic Building & Construction ETF (PKB), iShares U.S. Home Construction ETF (ITB) and SPDR S&P Homebuilders ETF (XHB). The March figures combine higher sales, falling median prices and sustained mortgage rates.