New-Home Sales Fall, but Still High, in March
Sales of new single-family homes fell in March for the first time in four months, a lull in the otherwise strong housing market that’s providing solid support for the economy, government figures showed Wednesday.
New-home sales dropped 5.0% last month to an annual rate of 828,000 units, the Commerce Department said. February home sales were revised to a 3.0% increase, to an 872,000 pace, from the initially reported 4.8% rise. Analysts had expected a 2.5% decline in March sales.
“This is a pause,” said William Sullivan, an economist at Morgan Stanley Dean Witter in New York. “The fundamentals for housing remain excellent,” with household incomes rising and credit readily available to consumers, he said.
Commerce revised down its estimates for new-home sales for each of the three months from December through February.
But analysts said neither the March decline nor the revisions took the luster off new-home sales.
For the first three months of the year, the annual rate of sales averaged 849,000 units, the second-highest quarter ever. The record was set in the second quarter of 1978, when the sales rate averaged 852,000. Moreover, the sales rate has exceeded 800,000 for a record seven straight months, government figures showed.
In addition, mortgage application volumes have remained unusually strong for several weeks, noted Scott Brown, an economist at Raymond James & Associates in St. Petersburg, Fla.
The Mortgage Bankers Assn. of America said Wednesday that its mortgage applications index increased 6.3% to 375.7 in the week ended April 24 from 353.4 the previous week. The index has held above last year’s peak since the first of January.
March new-home sales softened in every region of the country except the Northeast, where they were unchanged from February at 87,000 a year.
In the West, sales dropped 7.9% to an annual rate of 222,000. In the South, sales fell 5.1% to 334,000, and sales in the Midwest dipped 4.1% to 185,000.
The average sales price for a new home soared to a record $183,500 in March, up from $179,600 in February as a result of strong consumer demand, the Commerce Department said.
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Seasonally adjusted annual rate, in thousands of units:
Source: Commerce Department