On a month-by-month basis, new home sales dropped to a seasonally adjusted rate of 511,000 in March, down 1.5 percent. This drop can be attributed to an upward revision for February, from 512,000 to 519,000 than a change in demand for new homes, however. Although, as is always the case, month-by-month numbers can always be extremely volatile and more information can be gained by looking at the 12-month rolling total of new home sales and the year-over-year numbers.
Year-over-year, new home sales were up 5.14 percent in March and the rolling total was up 8.9 percent. According to Trulia, these numbers reflect a steady increase in demand from homebuyers and increasing confidence from homebuilders. It should be noted, though, that the year-over-year increase is down 9.7 percent from last month and it still remains about 24 percent below the 50-year average.
Trulia’s report also shows that the number of homes bought off a plan (bought before a structure was built on the property) continues to hold steady right around a 10-year high at 32 percent. This is likely a reflection of the low inventory of existing homes that is making it difficult for prospective buyers to find what they are looking for. With so few existing homes, buyers are much more likely to consider new homes. With more buyers looking at new homes, builders are able to sell more homes that haven’t been built yet.
For the full report and accompanying charts, click the link below.