March New Home Sales Surge Again

New home sales posted strong results for the second straight month, HUD and the Census Bureau reported yesterday.

The report said sales of new single-family houses in March rose to 621,000 on a seasonally adjusted annual rate, up by 5.8 percent from February’s revised 587,000 and by 15.6 percent from a year ago (537,000). February’s revisions added 43,000 sales.

Regionally, sales rose everywhere except the Midwest, where they fell by 4.5 percent to 84,000 units, seasonally adjusted, in March from 88,000 in February, but improved by 23.5 percent from a year ago. In the South, sales rose by 1.6 percent to 323,000 units in March from 318,000 in February and improved by nearly 6 percent from a year ago. In the West sales jumped by 16.7 percent to 175,000 units in March from 150,000 units in February and improved by nearly 33 percent from a year ago. In the Northeast, sales jumped by nearly 26 percent to 39,000 units in March from 31,000 units in February and improved by nearly 22 percent from a year ago.

The median sales price of new houses sold in March rose to $315,100 from $293,000 in February; the average sales price rose to $388,200 in March from $373,000 in February. The seasonally adjusted estimate of new houses for sale at the end of March rose slightly to 268,000 in March from 266,000 in February, representing a supply of 5.2 months at the current sales rate.

Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., said the jump in new home sales–the second strongest pace of the current cycle–coincides with strong demand indicated by recent builder sentiment surveys (the Mortgage Bankers Association’s March Builder Applications Survey reported applications for new homes jumped by 23 percent from February and by nearly 7 percent from a year ago).

“The return to winter weather did not seem to deter new home buyers,” Vitner said. “March’s gain in new home sales coincides with a cycle high in the NAHB/Wells Fargo Housing Market Index, which was boosted by strong buyer traffic that month. The index slipped slightly in April but still points to strong new home sales this spring.”