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New Home Sales Tumble In March

A warm and active winter could preface a stagnant spring in 2012, as new home sales fell 7.1 percent in March.

New home sales took their biggest dive of the year in March, but the housing market's bigger picture still shows improvement as the economic recovery staggers forward.

Sales fell 7.1 percent to a seasonally adjusted annual rate of 328,000 units in March, down from the 7.5 percent increase in February. The March report still lands 7.5 percent above the March 2011 figure of 305,000 units. The Commerce Department released the report Tuesday.

February's annual rate, initially reported as a 1.6 percent drop with 313,000 units sold, was eventually revised upward to 353,000, representing a swing of more than nine percent. Economists surveyed by Dow Jones Newswires had forecast a 320,000 annual rate in March, and point to the abnormally warm winter to explain February's boom and March's bust.

''Looking at the first quarter as a whole, sales are up 3.7 percent from the fourth quarter of 2011,'' said David Crowe, National Association of Home Builders' chief economist. ''This is exactly the kind of modest, but substantive, growth that we are expecting to see in the year ahead.''

New home sales are still less than half of the 700,000 that economists say represent a healthy market. Regional sales activity was mixed in March, with a 7.7 percent gain in the Northeast and a 3.1 percent increase in the South. The Midwest and West earned 20 percent and 27 percent declines respectively.

The March median sales price was $234,500, down 1 percent from February, and the average sales price was $291,200.

Homes available for sale at the end of March hit a record-low 144,000, representing a 5.3-month supply at the current sales rate, as builders have slowed construction amid the glut of distressed homes on the market. Similarly, only 48,000 homes were completed last month, also a record low.

Existing home sales followed a similar trend this month, falling 2.6 percent from February's 4.61 million sold to 4.48 million in March.

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December 7, 2019, 3:40 am PDT

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