New Home Sales Rise 11.1 Percent in MarchApril 26th, 2011 | Category: Industry News
Sales of newly built, single-family homes rose 11.1 percent to a seasonally adjusted annual rate of 300,000 units in March, the U.S. Commerce Department reported yesterday.
“The March pace of new-home sales more accurately reflects current market conditions than the extremely low pace we saw in the first two months of this year, when unusually poor weather likely kept buyers away,” said David Crowe, chief economist of the National Association of Home Builders (NAHB). “That said, the average sales pace for the first quarter of 2011 held at about the same level seen for the last half of 2010. A limiting factor is the extremely thin inventory of new homes for sale, which is now at its second-lowest level in history. Builders continue to confront major challenges in obtaining financing to build new homes, and the shortage of new product makes it that much tougher for them to compete with existing homes on the market. At the same time, tighter lending conditions are making it more difficult for qualified buyers to obtain a mortgage.”
New-home sales regained ground in three out of four regions this March, according to the NAHB. The Northeast posted a 66.7-percent gain from a very low sales pace in the previous month, while the Midwest posted a 12.9-percent increase and the West posted a 25.9-percent gain. Meanwhile, sales activity remained virtually unchanged in the South, with a 0.6-percent decline.
The inventory of new homes for sale fell to 183,000 units in March, which is the second-lowest level on record. This represents a 7.3-month supply at the current sales pace.