The New Residential Sales Index will post an updated report on Tuesday with new homes sales data for February and March. It will likely reflect that prices are holding firm or slightly increasing due to low inventory and elevated construction costs, even as waning sales continue. Here are five things to look out for ahead of the report:
- Double report will show bounce back and then volatility
This week the New Residential Sales data for both February and March will be released simultaneously. This double report will represent an interesting shift as the war with Iran began on Feb. 28 and the sales data is collected in the second week of each month. February may be a recovery report from the January drop in weather while the March report introduces and includes the first couple of weeks of the war with Iran.
- February weather may show recovery
The poor weather of January that delayed construction and displayed weak sales numbers should be a thing of the past for the February report. Despite continuing chilly temperatures in the Northeast, the Spring housing market should show a brief uptick for February as construction was able to resume. Buyers who were sidelined in January should have been able to sign contracts they planned for the new year and the brief dip in mortgage rates below 6% in February should help show stronger sales.
- Impact of the war for March
The full impact of the war will not be seen in the March report. While the war was ongoing when the report was collected in the middle of the month, it was still early days so buyers who are planning ahead may not change plans, according to Jeff Tucker, Principal Economist at Windermere Real Estate. The war may cause a level of economic hesitation amongst some buyers who feel they should wait it out. The mortgage rate hike from the previous month would not have inspired any additional confidence for buyers so they may be cautiously observing and waiting as geopolitical events continue to take place.
- Regional numbers for the South looking up
Southern cities like Miami are causing the regional sales numbers in the South to go up. This is backed by the housing starts data. The cold weather in January caused their February numbers to rebound well and they will probably have the best bounce back.
- Real war impact not known
Despite the war beginning on Feb 28., the March report is still too early for us to get a clue. The real wide scale impact will probably be seen in April. The fears of inflation due to oil prices will play a large part on whether buyers feel comfortable enough to go through on the purchase. February will see a surge from those who jumped at a mortgage rate below 6% for the first time in three years. New home sales are extremely sensitive to consumer confidence.