By Ruth Mantell
WASHINGTON (MarketWatch) -- Sales of new single-family homes rose 1.5% in March following a substantial drop in the prior month, signaling that the housing market continued to gain strength, the U.S. Department of Commerce reported Tuesday. The seasonally adjusted annual rate of new-home sales rose 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, with near-record-low interest rates continuing to support affordability. Sales are 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. 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.
