March New Home Sales Smash Record
March sales of new single-family homes surged by an unexpectedly strong 12.2% to an all-time high seasonally adjusted annual rate of 1.43 million units, according to Commerce Department figures released on April 26. “This surprisingly good number shows there’s still plenty of demand in today’s new-home marketplace,” said NAHB President Dave Wilson. “It may be that higher mortgage rates pushed more fence-sitters to go for it last month, which often happens when further rate gains are expected.” “The strength of this market continues to surprise most experts, and March’s big acceleration in new-home sales was both unexpected and unaccounted for by our own builder surveys and other market signals,” acknowledged NAHB Chief Economist David Seiders. “Given the pace of sales to date and the slimmer inventories of unsold homes, clearly the production side of this business remains exceptionally healthy. We are, however, keeping a close eye on investor activity in some extremely hot markets.” The number of new homes for sale fell about 1% in March, to a relatively thin 3.6 months’ supply at the current sales pace. Sales in March climbed 22% in the Midwest, 13.8% in the South and 10% in the West. They declined by 9% in the Northeast. The Commerce Department last week also reported substantial upward revisions to its nationwide new-home sales figures for December, January and February. “Looking to the future, it will be difficult to sustain as quick a sales pace as we’ve seen in March,” Seiders noted. “However, given the fact that long-term mortgage rates have actually fallen since then and that inventories are in such good shape, it’s likely that new-home sales for all of 2005 will challenge last year’s record 1.2 million units.” | 
