By Ruth Mantell, MarketWatch
WASHINGTON (MarketWatch) — Sales of new single-family homes rose in March following a substantial drop in the prior month, signaling restarted momentum in the housing market, according to data released Tuesday.
The Department of Commerce said the seasonally adjusted annual rate of new-home sales rose 1.5% to 417,000 in March from 411,000 in February.
Economists polled by MarketWatch had expected the rate to rise to 421,000 in March.
U.S. stocks SPX +0.79% continued their strong daily performance after the report was released.Read Market Snapshot.
With near-record-low interest rates continuing to support affordability, sales were 18.5% higher than during the same period in the prior year, and economists expect the housing market to continue to gain momentum this year.
Despite last month’s gains, the sales rate remains far below a bubble peak of almost 1.4 million in 2005.
Tuesday’s report echoes other recent housing-market data pointing to the housing market’s ongoing recovery. The National Association of Realtors reported Monday that existing-home sales declined in March, but were up 10.3% from the same period in the prior year.
New-home sales details
Regionally, results were mixed in March, with sales up 21% in the Northeast and 19% in the South. Meanwhile, sales fell 21% in the West and 12% in the Midwest.
The median sales price fell 6.8% in March from February — the largest drop since February 2011— but was up 3% from the same period in the prior year.
There was a 4.4-month supply of new homes available for purchase at March’s sale pace, matching February’s supply ratio.
Separately, the Federal Housing Finance Agency said prices rose 0.7% in February, or a gain of 7.1% from the same period of 2012. The index is calculated by using the purchase price of houses whose mortgages have been sold to or guaranteed by Fannie Mae or Freddie Mac
Ruth Mantell is a MarketWatch reporter based in Washington. Follow her on Twitter @RuthMantell.
