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New home sales hit record 1.23 million
WASHINGTON (CBS.MW) -- Sales of new homes in the United States rose about 8.9 percent in March to a record seasonally adjusted annualized rate of 1.23
million, the Commerce Department estimated Monday.
Sales in February were revised lower to an annual rate of 1.13 million from 1.16 million earlier.
The previous record sales rate was set last June at 1.20 million. Economists surveyed by CBS MarketWatch were expecting a sales rate of about
1.17 million in March Sales were propelled by low mortgage rates, favorable demographics, rising
disposable incomes and red-hot housing markets in some urban regions. The number of new homes for sale on the market rose about 2 percent to
378,000, representing 3.7-months of sales at the March pace. It's the leanest inventory since August.
The median sales price rose 8.8 percent year-over-year to $201,400, down from $210,000 in February.
New-home sales rose about 20 percent in the South to a record 613,000. Sales
plunged about 24 percent in the Northeast to 78,000.
The monthly figures are subject to revisions and to large sampling and other
statistical errors. The government cautions that it can take five months for
a trend in sales to be established.
Over the past five months, new-home sales have averaged 1.14 million, up from 1.13 million a month ago.
Realtors and homebuilders expect another banner year in 2004, with much of the strength front-loaded into the first half of the year. Already, mortgage
rates have climbed from their lows, tracking the upward movement in bond yields.
The National Association of Realtors will report on sales of existing homes on Tuesday. Economists expect a slight gain to 6.20 million from 6.12
million annualized sales.
Most analysts expect the Federal Reserve to raise its overnight lending rate
by as much as three-quarters of a percentage point by the end of the year, putting more pressure on mortgage rates to rise.
Still, the rising mortgage rates would presumably accompany a stronger job market, keeping home sales healthy, although not at record levels.
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