Rise in new home sales shows demand exists – but it’s fragile

Good news

Despite a disappointing spring, we finally have some good news to share today!

New-home sales surged in March, coming in well above expectations — proof that real demand is still out there. It’s fragile, but real. 

We also have a meaningful update in the ongoing listing wars: Zillow and Realtor.com have reached an agreement on how Preview listings will be distributed. 

It's an important development, and one we think is good for agents, buyers, and sellers alike. 

The challenges haven't disappeared. But for the first time in a while, there are real signs of life — and we're here for it.

- David

New home sales surpass expectations

In March, new single-family home sales rose 7.4% month over month to a seasonally adjusted annual rate of 682,000 — the fastest pace of 2026 and well above expectations, according to Bloomberg.

Here are the other key takeaways:

• The median sales price for a new home fell 6.2% year over year to $387,400 — the lowest level since July 2021. The decline likely reflects stronger demand for lower-priced homes and continued builder incentives.

• Homes priced between $300,000 and $400,000 saw particularly strong activity. About 22,000 homes in that range sold in March, the highest total in nearly five years. Sales of homes priced below that range also increased.

• Regional performance was mixed. Sales in the South — the nation’s largest home-selling region — jumped 11.1%, while the Northeast also rebounded sharply. Meanwhile, contract signings declined in the Midwest and West.

• Demand is fragile. Despite the improvement in sales, economists continue to describe demand as highly affordability-sensitive. Builders are still relying heavily on price cuts, mortgage-rate buydowns, and incentives to move inventory.

My take

The 7.4% jump looks strong until you notice where the sales are happening — in the $300K–$400K range, at prices not seen since mid-2021, supported by builder buydowns and incentives. That’s less a broad recovery and more demand being coaxed out of hiding at whatever price point buyers can still reach. Builders are effectively subsidizing the cost of money because mortgage rates refuse to cooperate, and that strategy has limits. As we said up top, demand is there, but it’s fragile.

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Zillow and Realtor.com team up on Preview listings

Starting this summer, Zillow and Realtor.com are teaming up to syndicate Zillow Preview listings across both platforms. This will give pre-market homes exposure to roughly 75% of major portal traffic combined. 

The companies say the partnership is meant to push back against the growing fragmentation of listings into private networks and exclusive brokerage ecosystems.

Here’s what Zillow and Realtor.com announced:

• Preview listings will appear on both platforms automatically: Agents at participating brokerages will be able to market pre-market homes simultaneously across Zillow and Realtor.com before listings officially hit the MLS.

• The companies are framing this as a transparency initiative: Zillow CEO Jeremy Wacksman said buyers deserve equal access to listings and information, while Realtor.com CEO Damian Eales warned that fragmented inventory is becoming “a dangerous direction for the industry.”

• More than 60 brokerages are already participating: Current partners include Keller Williams, RE/MAX, Berkshire Hathaway HomeServices, HomeServices of America, Engel & Völkers, and Side

My take

We welcome this. This is a reasonable development. Pre-marketing homes for a limited window before MLS entry is a workable middle ground in the ongoing fight over exclusive listings — but only if those homes stay visible to the broader market. The risk has always been that pre-market becomes a euphemism for private, accessible only to buyers plugged into the right brokerage network. A partnership that keeps pre-market inventory in front of consumers on open platforms addresses that concern directly. More exposure, more transparency, and wider access make for a healthier market — for buyers and sellers alike.

Markets with the highest share of REO sales

In Q1 2026, homes sold by banks or other lenders (REO sales) accounted for 1.6% of all home sales nationwide, up from 1.3% the previous quarter and 1.5% at the same time last year. 

According to ATTOM, here are the markets with the highest and smallest share of REO sales:

My take

Right now, a lot of agents are struggling to win listings and get deals across the finish line. But even in tough times, real estate deals still get done. Deals don’t die; they concentrate. They simply shift into different parts of the market. That’s why we encourage agents to never passively accept market conditions. Instead, position yourself to become a deal maker where activity still exists. One way to do that is to broker REO deals — either as an REO listing specialist or a buyer’s agent focused on distressed opportunities. In nearly every major metro, these deals are still happening, even in difficult markets. Don’t overlook them. 

Schematics

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• How celebrity homes actually get staged and sold faster

Foundation Plans

Advice from David to win the day

Last week, we talked about the mindset agents need when clients start getting cold feet. You can read it here. 

This week, we want to focus on the conversation itself — because many agents lose clients not when objections appear, but in how they respond to them.

Clients who hesitate are usually not looking for a sales pitch. They are looking for clarity, reassurance, and someone who can help them calmly think through a high-stakes decision. That changes how the conversation should sound.

When a client pumps the brakes on a deal, here's what to do:

1. Lead with empathy, make the client feel heard – When a client starts hesitating, the instinct is often to jump straight into problem-solving mode. Resist that urge. Before anything else, acknowledge that their concern makes sense. This is a major financial and emotional decision. 

Clients need to feel that their agent is there to help them think clearly — not pressure them into crossing the finish line. A little empathy goes much further than a hard close.

2. Reconnect them to why they started – Fear has a way of making people lose sight of their original motivation. Your job is to gently bring them back to it. Think about what drove the move in the first place: a growing family, a job relocation, downsizing, or some other major life transition. 

If you understand that motivation clearly, you can reflect it back to them in a way that cuts through the noise. You're not arguing against their fear. You're reminding them of their priorities.

3. Identify the real source of the hesitation – Not every case of cold feet looks the same, and the way you respond should depend entirely on what's actually driving it. A client rattled by headlines about the economy is in a very different headspace than one who just got a troubling inspection report. One conversation is about the world; the other is about the house. Before you try to solve anything, get clear on which one you're actually dealing with.

The agents who handle these moments best are usually the ones who stay calm, listen carefully, and resist the urge to rush the conversation. In situations like these, composure is often more persuasive than any hard sell.

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

“You’ve gotta keep control of your time, and you can’t unless you say no. You can’t let people set your agenda in life.” — Warren Buffett

Don’t let events or other people set your agenda, friends. Stay ruthlessly focused on your goals — your time is limited, and you only get one life.

Make the most of it. Have a wonderful week. We’ll see you back here on Friday!

- David