Sales higher than expected in first three months of year, revisions show
Sales of new homes were nearly unchanged in March, the Commerce Department reported Friday, adding that sales in the first two months of the year were stronger than initially reported.
Sales fell 0.6% in March to a seasonally adjusted annual rate of 356,000 from 358,000 in February. February's sales pace was revised higher from 337,000 reported a month ago. January's sales pace was revised from 322,000 to 331,000, the low for the cycle.
Builders continued to cut prices in March, and have reduced their inventories of unsold homes by a record amount in the past year. But the time it takes to sell a home rose to record high of 10.2 months, the government said.
Builders are facing the worst market conditions in a half century. Record numbers of foreclosures of existing homes are forcing prices lower. Buyers are struggling with higher standards to obtain a loan, massive job losses and the real possibility that they can save thousands of dollars by waiting to buy.
Sales are down 30.6% in the past year.
The median sales price of a new home fell to $201,400 in March, down 12.2% in the past year.
The inventory of unsold homes fell 5.2% in March to 311,000, down a record 33.7% in the past year. The inventory represents a 10.7 month supply at the March sales pace.
Government statisticians have low confidence in the monthly report, which is subject to large revisions and large sampling and other statistical errors. In most months, the government isn't sure whether sales rose or fell. The standard error in March, for instance, was plus or minus 19%. Read the full government report.
The government says it can take up to five months to establish a new trend in sales. Over the past five months, sales have been on a 361,000 annual pace, 38% slower than a year earlier.
Sales of existing homes fell 3% in March to a seasonally adjusted annual rate of 4.57 million, the National Association of Realtors reported Thursday. Homes are mostly being sold to first-time buyers, who can get thousands in subsidies from federal and state governments to buy a home. Distressed sales, including foreclosures and short sales, accounted for more than half of sales in March, the real estate group said. See full story.
In a separate report, the Commerce Department said Friday that orders for durable goods fell 0.8% in March, the seventh decline in the past eight months. Encouragingly, orders for core capital equipment goods rose 1.5%, the second straight increase.
