New home sales in the United States bounced back with a 20.7% increase in March after a surprising 18.2% decline in February, according to Commerce Department data released Friday.
The robust gain, which came as sales surpassed 1 million for the second time this year, shows that February’s decline was most likely a weather-driven outlier when a winter freeze gripped the nation.
A deeper look into market fundamentals suggests that there are positives for the prospective homebuyer that will help propel the market. For example, the interest rate on a 30-year mortgage dropped to 3.2%, down from 3.36% in February. And median new home prices declined by 4.37%, to $330,800.
The combination of these factors translates to a 6.3% reduction in the monthly payment for a traditional 80% loan-to-value home mortgage. This is a positive trend as housing affordability continues to be a cause for concern amid the surging market.
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