New home sales rose 8.8% in March despite higher mortgage rates

New home sales rose in March despite the housing market feeling the effects of higher mortgage rates, which have recently inched even higher.

New home sales increased 8.8% from February to 693,000, according to a Tuesday report from the Census Bureau. The number of new home sales is 8.3% higher than it was in March of last year, owing in part to dampened inventory of existing homes.

The median sales price for a new home was $430,700 in March.

The housing market is in a complicated spot right now. During the worst of the pandemic, the Federal Reserve cut its interest rate target to near-zero and mortgage rates plunged to ultra-low levels. At one point in early 2021, people were locking in 2.5% mortgages — the lowest level in post-war modern history.

The low rates prompted a rash of homebuying

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