The Census Bureau released its delayed February and March new home sales data following last fall’s government shutdown, and both reports came in stronger than expected. Sales rose 9% month-over-month in February and another 7.4% in March, marking a combined nearly 17% increase since January.
What’s the bottom line?
Some headlines focused on a 5.3% drop in the median home price from February to March, suggesting builders are cutting prices due to market challenges. But a closer look tells a more complete story. Since the median price reflects the midpoint of all sales, it can shift based on what’s selling most. In this case, there was a noticeable increase in homes sold under $500,000 and fewer above that point, helping explain the dip in the median. Note that a drop in the median price is not the same as declining home values. In fact, broader home price trends and forecasts continue to point toward steady appreciation.