Sales of single-family homes defied expectations in March, increasing 8.8% compared with February, according to new data from the U.S. Census Bureau and the Department of Housing and Urban Development.

About 693,000 homes sold last month for a median price of $430,700.

What You Need To Know

  • Single-family home sales increased 8.8% in March compared with February, according to new U.S. Census Bureau data

  • About 693,000 homes sold in March

  • The median price of a single-family home was $430,700

  • Home prices increased 0.6% compared with February

Analysts had predicted March sales would be closer to 640,000, as mortgage rates hovered near 7% and sellers stayed on the sidelines to preserve locked-in, record-low rates secured during the pandemic.

Home prices increased 0.6% in March compared with February and 7.3% compared with a year earlier, according to Redfin.

“Elevated mortgage rates are putting a cap on home price growth,” Redfin Senior Economist Sheharyar Bokhari said in a statement Tuesday. “Sellers can’t jack up prices like they did during the pandemic because buyer budgets are already constrained by 7% interest rates.”

Bokhari noted that home prices remain at record highs because of a shortage of homes for sale. He said price growth is like to continue stagnating until the Federal Reserve reduces interest rates — a move that may not happen until at least September this year.