WASHINGTON, D.C.: Sales of new single-family homes in the U.S. rose more than expected in March as buyers rushed to take advantage of slightly lower mortgage rates.

But worries about the economy could still slow down the housing market's recovery.

According to the Census Bureau, new home sales jumped 7.4 percent in March to an annual rate of 724,000 homes — the highest since September 2024. February's numbers were slightly revised down to 674,000 homes.

Experts had predicted sales would reach 680,000, so the actual figure was a pleasant surprise. Compared to a year ago, March sales were up six percent. New home sales are counted when contracts are signed.

Mortgage rates played a role. According to Freddie Mac, the average 30-year fixed mortgage rate fell to 6.65 percent in March from 6.76 percent in February. But rates have gone up again since then, reaching 6.83 percent last week—the highest in two months.

This rise is partly due to President Trump's changing tariff policies, which have raised fears of economic slowdown and higher inflation. Some economists now doubt that the Federal Reserve will cut interest rates in June.

Fed Chair Jerome Powell recently said the Fed isn't in a hurry to change rates but warned that Trump's trade policies could hurt the economy by increasing inflation and unemployment. Trump had also criticized Powell, raising concerns about the Fed's independence. However, he backed off threats to fire Powell, calming markets for now.

Tariffs have also pushed up building costs. The National Association of Homebuilders said new tariffs — including 145 percent on Chinese goods and 25 percent on foreign steel and aluminum — have added about US$10,900 to the cost of building a home. They expect home sales to slow over the next six months.

In March, home sales rose in the South and Midwest but fell in the Northeast and West. The median home price dropped 7.5 percent from a year ago to $403,600. Most of the homes sold were priced below $499,999.

There were 503,000 new homes on the market in March — the most since 2007. At the current sales pace, it would take 8.3 months to sell all of them, down from 8.9 months in February.