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New Home Sales on the Upswing
And Price Increases Are Tempered

New Home Sales on the Upswing

The Wells Fargo Economics Group credits lower mortgage rates and an increase in more modestly priced home construction as the reasons that the latest numbers on new home sales climbed month-to-month.

After a reported month-to-month loss of 4.9% in March in existing home sales, good news returned as new home sales posted a 4.5% gain in the same month. Lower price points were in evidence as an estimated 50% of the sales were below $300,000 compared to a 43% average realized over the course of 2018.

In fact, the median sales price of new homes in March was down almost 10% year-over-year. That makes five consecutive monthly declines in that calculation.

The Northeast region did not add to the otherwise rosy picture as new home sales there dropped 22.2%. The Midwest had the strongest month with a 17.6% gain. The West registered growth of 6.7% and the South weighed in with a 3.6% increase.

A statement from the Wells Fargo Economics Group read, "While existing sales were softer during the month, the housing market appears to be improving as the spring selling season gets underway. Builder discounting and a shift in focus toward building lower priced homes in more affordable areas continue to keep price increases in check."

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January 25, 2020, 6:49 pm PDT

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