March New Home Sales Off Record Low

The US Census Bureau reported new home sales increased in March to a seasonally-adjusted annual rate of 300,000, which is an 11.1% increase from an all-time record low in February.  The first quarter average for new home sales remains about equal to the last half of 2010 as housing remains in a holding pattern waiting for consistent positive news from the overall economy.

The inventories of new homes for-sale dipped once again to 183,000 and now sit at only 2,000 homes above the record low set in August 1967.  The months’ supply dipped to 7.3.  Low inventories of new homes are the result of low housing demand but also because builders are unable to obtain production financing in recovering markets.

The March improvement in sales was broad based, rising in three of the four regions and remaining virtually unchanged in the South.  Prices fell 5% from March 2010 as a larger share of the homes sold were in the $150,000 and below category.