Sales of new single-family homes in the United States rose sharply in March 2025, as homebuyers took advantage of a temporary dip in mortgage rates.
However, ongoing concerns about economic growth and rising construction costs continue to cast a shadow over the housing market’s recovery.
According to data released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development, new home sales reached a seasonally-adjusted 724,000 in March.
This marks the highest level since September 2024 and a 7.4% increase from the revised February figure of 674,000.
Year-on-year, sales rose 6.0% from the 683,000 units recorded in March 2024.
New home sales, which represent around 14% of all U.S. home transactions, are recorded at the point of contract signing. March’s gain was largely driven by robust activity in the South and Midwest, while sales fell in the Northeast and West.
Despite the stronger figures, affordability remains a concern. The median price of a new home declined 7.5% year-on-year to $403,600 in March, with most sales occurring below the $500,000 mark.
The uptick in demand coincided with a drop in mortgage rates. The average rate on a 30-year fixed mortgage eased to 6.65% in March from 6.76% in February, according to Freddie Mac.
However, the reprieve was short-lived; rates rose to a two-month high of 6.83% last week amid growing market unease over President Donald Trump's shifting tariff policy.
The administration’s latest round of trade measures includes raising tariffs on Chinese goods to 145% and levying a 25% duty on imported steel and aluminium. According to the National Association of Homebuilders, these policies have driven up construction costs by an estimated $10,900 per home, a burden that could weigh on future sales.
