Finally, after four months of record low sales, new home sales surged 27% nationally from February sales and a 24% increase from the same time last year.
On Friday, the Commerce Department said that new home sales rose to a seasonally adjusted annual sales pace of 411,000 in March. It was the strongest month increase in 47 years.
The median sales price was up 4% from a year earlier reaching $214,000, but down more than 3 % from February.
This report for new home sales shows the signed contracts to purchase homes instead of completed sales and which gives economists idea of how many buyers were out shopping for new homes in a given month.
Consumers who are trying to qualify for the federal tax credits that will expire at the end of this month are probably responsible for the increase in new home sales.
Buyers must have a signed contract completed by the end of next week and must complete the transaction by the end of June to qualify. According to the Internal Revenue Service, almost 1.8 million households have used the credit at a cost of $12.6 billion.
The rise in new home sales was seen nationwide. In the South, sales grew an enormous 44% and in the Northeast, 36%. They also rose about 6% in the West and in the Midwest, 3%.
The number of new homes on the market in March fell 2% to 228,000. At the current sales pace, it would take nearly 7 months to exhaust that supply.
Contributed by MLR Realty
