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New-home sales unexpectedly surged in March as the West region saw sales increase 28.3 percent, accounting for nearly all of the gains during the month.

"According to a recent Beige Book published by the Federal Reserve, demand for housing in the western states increased despite low-inventory levels and elevated prices," NAFCU Research Assistant Yun Cohen said in a NAFCU Macro Data Flash report. "Nationwide, the number of available new homes for sale remained at a nine-year high."  

According to data released Tuesday by the Census Bureau, new-home sales rose 4 percent in March, representing an 8.8 percent increase from a year ago. Sales from the prior three months were also revised upward.

In March, sales rose in the South (+0.8 percent), but dropped in the Northeast (-54.8 percent) and Midwest (-2.4 percent).

Based on current-month sales, there were 5.2 months of supply in March, down from 5.4 months in February. The number of unsold homes left on the market remained at 301,000 units, which represents a 13.2 percent increase from a year ago.

The median new-home price, non-seasonally adjusted, climbed from $325,800 in February to $337,200 in March. March's prices were 4.8 percent higher than a year ago.

"The median price of new single-family homes has increased year-over-year for 11 consecutive months," Cohen added. "Higher material costs, labor shortages as well as rising mortgage rates pose additional headwinds for the market."

In related news, the S&P CoreLogic Case-Shiller Indices – the leading measure of U.S. home prices – reported a 6.8 percent year-over-year gain in February, up from 6.4 percent in January, in its 20-City Composite. This marks the fastest growth pace since 2014.