Sales of new homes accelerated last month across most of the United States, jumping to a 15-year high and more than recovering from cooling caused by winter storms in February, the government reported Friday.

The supply of homes for sale continues to be a limiting factor, but most economists expect robust demand to continue in the hot housing market that has been a bright spot in the world’s largest economy in the year of the Covid-19 pandemic.

The 20.7 percent surge in March pushed the annualized sales rate to more than 1.02 million single-family homes, the Commerce Department reported, its highest level since August 2006 before the mortgage market implosion sparked the 2008 global financial crisis.

Unlike the frenzied activity in the lead up to that crisis, rising mortgage rates caused six weeks of declines in home loan applications, before a dip in interest rates last week fueled a slight rebound from would-be homebuyers.

The annual sales rate was nearly 67 percent higher than in March 2020 when the Covid-19 pandemic hit the US economy, according to the data.

The rebound was much bigger than analysts were expecting, and ran contrary to the 3.7 percent decline in existing home sales last month, a far larger market that was chilled by tight supply and rising prices.

Even with strong buyer traffic “builders are still grappling with major supply chain issues and soaring materials costs, which are causing construction delays and preventing them from adding to the already very low inventory,” said Chuck Fowke, chairman of the National Association of Home Builders (NAHB).

Economist Mickey Levy of Berenberg Capital Markets pointed to the seven percent year-over-year rise in construction costs which “contractors are readily passing on” to home purchasers.

But the median sales price dipped to $330,800, its lowest since August 2020, reflecting a big jump in sales of more moderately priced homes.


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