Rise in new home sales shows demand exists — but it’s ‘fragile' 

Sales of new homes perked up in the U.S. in March despite heightened economic uncertainty amid the start of the war with Iran — but economists are warning that the uptick may not have much momentum.

New home sales up year-over-year: After a slow start to the year, March's seasonally adjusted annual rate for sales of new single-family homes was 682,000, up 3.3% compared to a year ago and up 7.4% compared to February, according to U.S. Census Bureau data.

Though the uptick in sales shrunk overall new home inventory, the market is still firmly tilted in buyers' favor with 8.5 months of supply — down from 9.2 months in March 2025 but above what's considered a balanced market of around 6 months.

Builders still offering incentives: One reason for the boost: price adjustments by builders, according to Odeta Kushi, deputy chief economist at First American. The median price for new homes sold in March was $387,400, down 6.2% compared to a year ago and down 5.3% from February.

"Builders are adapting to the market — reducing prices, offering incentives, and shifting to smaller homes — to meet buyers limited by affordability constraints," Kushi said. "The housing market is showing some spring bounce, proving that demand is there, but only at the right price. Yet, that demand remains fragile and highly sensitive to affordability and economic uncertainty."

For prospective buyers, now is "a great time to find a deal on a new build," said Joel Berner, senior economist at Realtor.com. "Not only are new home sales prices now actually lower than existing homes, but builders are still offering incentives like cash at closing, free home upgrades, and mortgage rate buydowns that make the savings on buying new construction even greater."

Builders "are in a tough position, being forced to take high volumes of low prices," Berner added, "but they will not do this forever. Buyers in the new construction market right now can take advantage of some serious purchasing power."

Overall home prices trending up: Lower new home prices are arriving as overall home prices are climbing. In the first quarter of 2026, prices rose in 71% of metro markets, according to the National Association of Realtors, though the overall rate of growth has slowed.

The median price for a single-family home in the first quarter was up 0.5% compared to Q1 of 2025, while the median price increased 1.2% year-over-year in the final quarter of last year. The Northeast had the biggest year-over-year gains with prices rising 4.9%. The Midwest (up 3.6%) was next, followed by the South (up 0.2%). Though down 2.9% year-over-year, the West had the highest median price of $607,600.