US New Home Sales Up 4%, West Marks 11-Year Highs
Sales of new US single-family homes increased in March as sales in the West rose to their highest marks in more than 11 years.
The Commerce Department said on Tuesday new home sales increased 4.0% to a seasonally adjusted annual rate of 694,000 units last month. February’s sales pace was revised up to 667,000 units from the previously reported 618,000 units.
Economists polled by Reuters had forecast new home sales, which account for 11% of housing market sales, rising 1.9% to a pace of 630,000 units last month.
New home sales are drawn from permits, they jumped 8.8% from a year ago.
March’s rise in new home sales and upward revisions to January and February sales data will probably not change economists’ expectations that residential investment declined in the first quarter. The housing market is struggling with a chronic shortage of properties that is boosting home prices and weighing on sales at the lower end of the market.
Rising mortgage rates and moderate wage growth are also making home purchasing less affordable, especially for 1st-time buyers who account for less than 33% of transactions.
Sales in the West rose 28.3% to their highest marks since December 2006.
Sales rose 0.8% in the South, which accounts for the bulk of new home sales.
They plunged 54.8% in the Northeast and dropped 2.4% in the Midwest.
At March’s sales pace it would take 5.2 months to clear the supply of houses on the market, down from 5.4 months in February. About two-thirds of the houses sold last month were either under construction or yet to be built.