March New-Home Sales
Smash Old Record
U.S. new home sales jumped 12% in March to a record 1.431 million seasonally adjusted annual rate, the Commerce Department estimated Tuesday.
March sales smashed the previous record of 1.304 million homes set in October. It was the largest percentage gain in nearly 12 years.
The increase far outpaced expectations of economists, who forecast a slight pullback in sales to 1.19 million, according to a survey conducted by MarketWatch.
With sales heating up, the inventory of unsold homes on the market fell 0.9% to 433,000, representing a tight 3.6-month supply at the March sales pace. Read the full report.
The median price of a new sold home fell 9.3% in March to $212,300. Median prices - with half the homes selling for more and half for less -- are up 1.3% in the past year.
On Monday, the National Association of Realtors said existing-home sales rose to 6.89 million in March, the third highest total ever. Median prices for existing homes are up 11.4% in the past year, the biggest increase in 25 years.
The hot housing market is fueled by still-low interest rates, rising incomes and a widespread belief that real estate is the best investment. Some policymakers are considering whether the housing market could be showing signs of speculation that marks an investment bubble.
The Federal Reserve is expected to raise its benchmark short-term interest rate again next week to 3%. Despite a 1.75 percentage point increase in the federal funds rate in the latest cycle of monetary tightening by the Fed, mortgage rates have remained relatively low.
Meanwhile, the Conference Board said the April consumer confidence index sank to 97.7 points and the expectations index fell to the lowest level in two years.
The government revised its estimate of February new home sales higher to 1.275 million from 1.226 million previously reported.
The government cautions that its housing data are volatile and subject to large sampling and other statistical errors. It can take up to six months for a new trend in sales to emerge.
In the past six months, sales have averaged 1.27 million homes, compared with 1.23 million in the six months ended in February.
In all of 2004, 1.203 million new homes were sold.
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