By ALAN ZIBEL
AP Real Estate Writer
WASHINGTON (AP) — Sales of new homes surged 27 percent last month, bouncing
off the previous month’s record low and blowing past expectations as better
weather and government incentives boosted sales.
The Commerce Department said Friday that new home sales rose in March to a
seasonally adjusted annual sales pace of 411,000. It was the strongest month
since last July and the biggest monthly increase in 47 years.
Economists surveyed by Thomson Reuters had expected a sales pace of 330,000.
February’s results were revised upward to 324,000, but remained an all-time
low. Sales had been especially weak over the winter, partly due to bad weather
in much of the country.
The median sales price was $214,000, up more than 4 percent from a year earlier
but down more than 3 percent from February.
The new home sales report reflects signed contracts to purchase homes rather
than completed sales and thus gives economists a feel for how many buyers were
out shopping for new homes in a given month.
It is likely capturing consumers who are trying to qualify for federal tax
credits that will expire at the end of this month. The government is offering
an $8,000 credit for first-time buyers and $6,500 for current homeowners who
buy and move into another property.
To qualify, buyers must have a signed contract complete by the end of next week
and must complete the transaction by the end of June. Nearly 1.8 million
households have used the credit at a cost of $12.6 billion, according to the
Internal Revenue Service.
The rise in new home sales was seen nationwide. Sales grew a whopping 44
percent in the South and 36 percent in the Northeast. They also rose about 6
percent in the West and 3 percent in the Midwest.
The number of new homes up for sale in March fell 2 percent to 228,000. At the
current sales pace, it would take nearly 7 months to exhaust that supply.