New Home Sales, Earlier Revisions Point to Stronger Spring

New single-family home sales rose by a healthy 4 percent in March, coming off improved revisions from previous months, HUD and the Census Bureau reported yesterday.

The report said sales of new single-family houses in March rose to a seasonally adjusted annual rate of 694,000, 4 percent higher than February’s revised 667,000 ad 8.8 percent higher than a year ago (638,000).

Regionally, a sharp increase in sales in the West and a modest increase in the South more than overcame declines in the weather-plagued Northeast and Midwest.

In the West, sales jumped by 28.3 percent in March to 222,000 units, seasonally adjusted, from 173,000 units in February and improved by nearly 25 percent from a year ago. In the South, sales rose by 0.8 percent to 371,000 units in March from 368,000 units in February and improved by 10.4 percent from a year ago.

In the Northeast, late winter storms slammed sales, falling by nearly 55 percent in March to just 19,000 units, seasonally adjusted, from 42,000 units in February and by nearly 53 percent from a year ago. In the Midwest, storms dampened sales as well, falling by 2.4 percent to 82,000 units in March from 84,000 in February and by 2.4 percent from a year ago.

The report said the median sales price of new houses sold in March rose to $337,200; the average sales price was $369,900. The seasonally adjusted estimate of new houses for sale at the end of March was 301,000, representing a 5.2-month supply at the current sales rate.

Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., noted were stronger than previously reported in February, as the slight decline revised up to a 3.6 percent gain. The upward February and January revisions, he said, paint a more positive picture of the housing market.

“The revisions bring new home sales in line with the much more optimistic home builder confidence readings, which remain near cycle highs,” Vitner said. “Even with the revisions, the harsh weather is still evident in the data, as new home sales in the Northeast declined sharply in March and now trail their year-ago pace through March.”