New Construction Up and Values Still Rising

Newly constructed homes with a signed contract are on the rise.  For the month of March, new home sales increased to 692,000 from 667,000 in February.  This new rate of increase is at its highest level since 2017 and proves there are still large amounts of demand and competitive interest rates.  The largest gains in new home sales came from the west and south regions of the U.S.  When new homes sell, they open up consumers to purchase items to make it a “home,” such as furniture, blinds, appliances, etc.  Because of this, higher home sale numbers point to increased consumer purchasing and stronger economic conditions.

Every month, the Federal Housing Finance Agency (FHFA) reports on the level of appreciation across the nation.  For this month’s release, its Home Price Index, or HPI, reported on February’s data, and we see appreciation at a level of 4.9%.  Even though this number is lower than its HPI for January (5.6%), it is still a positive number and means that homes are appreciating at a strong rate.  The homes that this report focus on are single family with conforming, conventional mortgages.  FHA and VA mortgages with higher loan amounts are excluded from this report.