New-Home Sales Tumbled To a 16-Year Low in March
Sales of new homes plunged in March to the lowest level in 16 1/2 years as housing slumped further at the start of the spring sales season.
The median price of a new home in March compared to a year ago fell by the largest amount in nearly four decades.
The Commerce Department reported Thursday that sales of new homes dropped by 8.5 percent last month to a seasonally adjusted annual rate of 526,000 units, the slowest sales pace since October 1991.
The median price of a home sold in March dropped by 13.3 percent compared to March 2007, the biggest year-over-year price decline since a 14.6 percent plunge in July 1970.
The dismal news on new home sales followed earlier reports showing that sales of existing homes fell by 2 percent in March.
Housing, which boomed for five years, has been in a prolonged slump for the past two years with sales and home prices falling at especially sharp rates in formerly boom areas of the country.
For March, sales were down in all regions of the country, dropping the most in the Northeast, a decline of 19.4 percent.
Sales fell by 12.9 percent in the Midwest, 12.5 percent in the Midwest and 4.6 percent in the South.
The pace of sales slowed to an annual rate of 526,000 last month, the weakest rate since October 1991, the Commerce Department said.
This follows a downwardly revised 575,000 in February and delivered more grim news to the troubled housing sector.
Economists polled by Reuters had forecast March sales to slow to a 580,000 annual pace from the previously reported 590,000 reading the month before.
The inventory of unsold homes dipped 1.1 percent to 468,000 which, at the current level of sales, would take 11 months to clear, up from February's 10.2 months' supply.
The March median sales price for a new home dropped 13.3 percent from the year-ago level and, at $227,600, was down 6.8 percent compared with the month before.
The Commerce Department said that the year-on-year percentage decline was the largest since July 1970.