New home sales rose for the fourth consecutive month in March as mortgage rates fell steadily following the commercial banking crisis, according to Census Bureau data released on Tuesday.
Sales of new single-family homes increased by 9.6 percent above the revised rate from a month earlier to a seasonally adjusted rate of 683,000 units. Sales ticked up in the Northeast, Midwest and West. Even so, sales were down 3.7 percent from 707,000 at the same point last year.
The seasonally adjusted number of new homes for sale at the end of March was 432,000, which means the supply of new homes would last nearly eight months at the current sales rate.
Meanwhile, existing home sales, which include transactions for single-family homes, townhomes, condominiums and co-ops, dipped by 2.4 percent last month to an annual rate of 4.4 million, according to data from the National Association of Realtors. Sales declined 22 percent year-over-year.
But new home sales have ticked up in recent months as mortgage rates moderated following months of volatility and buyers have adjusted, Kelly Mangold of RCLCO Real Estate Consulting said in a statement.
“Buyers have begun to adjust to the elevated mortgage rate levels, especially in areas where home prices have adjusted downwards to compensate,” Mangold said.
“Despite signs of economic uncertainty in March, which included news of bank failures, buyers are still showing demand for new homes,” Mangold added.
Rising mortgage rates were fueled by the Federal Reserve’s aggressive effort to cool inflation. A series of jumbo interest rate hikes pushed up mortgage rates and dramatically cooled demand in a once red-hot housing market.
But rates are rising again after more than a month of declines. The benchmark 30-year fixed rate mortgage increased last week to 6.39 percent.
Separate data released on Tuesday revealed that nationwide home prices increased in February after falling for seven consecutive months.
New S&P CoreLogic Case-Shiller U.S. National Home Price Index data showed that prices rose from the previous month by 0.2 percent after seasonal adjustment. Prices were up by 2 percent year-over-year.