New Home Sales Fall for Third Straight Month

New home sales continued to stall as the spring home buying season kicks into gear, falling for the third consecutive month, HUD and the Census Bureau reported yesterday.

The report said new single-family home sales fell to 511,000 in March, down by 1.5 percent from February’s revised 519,000. From a year ago, sales rose by 5.4 percent (485,000).

Regionally, home sales improved everywhere except the West, which saw a nearly 24 percent decline (to 107,000 units from February’s 140,000 units) to neutralize other regional gains. From a year ago, sales in the West fell by nearly 21 percent.

In the South, new home sales rose by 5.0 percent to 314,000 units from February’s 299,000; sales improved by 15.4 percent from a year ago. In the Midwest, sales rose by 18.5 percent to 64,000 units from February’s 54,000 and improved by 10.3 percent from a year ago. In the Northeast, sales were unchanged at 26,000 units but up by 30 percent from a year ago.

“The winter pullback follows three exceptionally strong months last fall and likely reflects the impact of large seasonal adjustment factors at this time of year,” said Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C.

The median sales price of new houses sold in March fell to $288,000 from $297,000; the average sales price rose to $356,200 from $342,000. The seasonally adjusted estimate of new houses for sale at the end of March was 246,000, representing 5.8-month supply at the current sales rate. The South and West accounted for three-fourths of the rise in inventory.