New home sales rise 11.1 percent in March

Sales of newly built, single-family homes rose 11.1 percent to a seasonally adjusted annual rate of 300,000 units in March, the U.S. Commerce Department reported today.

The gain partially offsets a large decline that occurred in new-home sales in February when activity hit a record low due partly to poor weather conditions.

“The fact that new-home sales have regained some of the ground they lost earlier this year is a promising sign at the start of the spring home buying season,” said Bob Nielsen, chairman of the National Association of Home Builders. “While potential buyers continue to be extremely cautious, they are starting to take a look around and evaluate their very good options with regard to attractively priced new homes.”

New-home sales regained ground in three out of four regions this March. The Northeast posted a 66.7 percent gain from a very low sales pace in the previous month, while the Midwest posted a 12.9 percent increase and the West posted a 25.9 percent gain. Meanwhile, sales activity remained virtually unchanged in the South, with a 0.6 percent decline.

The inventory of new homes for sale fell to 183,000 units in March, which is the second-lowest level on record. This represents a 7.3-month supply at the current sales pace.