New home sales increased 4.5 percent in March, beating economists’ expectations and hitting a 16-month high. The data, from the U.S. Census Bureau and the Department of Housing and Urban Development, is more evidence that home buying conditions are becoming more favorable just as buyer demand heats up for the season. The combination of a strong job market and low mortgage rates is encouraging buyers and helping steady a housing market that went through its ups-and-downs last year. And, since new-home sales gains build confidence in the market, three consecutive months of improvement may help spur builders to build even more new homes. As it is, growing inventory has led to a 9.7 percent drop in the median sales price of a new house, according to the March report. Overall, the latest new home sales data is encouraging, as the market for newly built homes plays a vital role in balancing supply and demand and keeping affordability conditions manageable for buyers. More here.
