The National Association of Home Builders (NAHB) announced new-home sales posted an all-time record in March 2004, helped by the second lowest interest rates since 1956 and a strengthening national economy. The pace of new single-family homes sales increased 8.9 percent over an already strong February 2004 to a seasonally adjusted annual rate of 1.2 million, according to the U.S. Commerce Department. This was a 21.8 percent increase from the March 2003 pace.
"Home sales were very robust as builders entered their peak selling season," NAHB President Bobby Rayburn said. "Builders are working hard to keep up with a very strong demand."
"The market is very strong and interest rates are still very attractive," said David Seiders, NAHB chief economist. "Though interest rates are beginning to rise as the economy improves, we still expect the housing market to remain strong because the fundamental household incomes, employment, and household formations are strong."
Three regions registered sales increases for the month. The South posted the largest increase with a 19.3 percent gain. The Midwest posted a 5 percent gain and the West registered a 5.1 percent sales increase. Sales in the Northeast declined 24.3 percent for the month, but sales for the first quarter of the year increased 28.7 percent from the first quarter of 2003, which was the highest percentage change of all four regions.
The inventory of new homes for sale in March 2004 was 372,000 units, representing a low 3.7-month supply at the current sales pace. "The supply-demand balance in the new-home market is healthy," Mr. Seiders said. "Builders are not overextending production. Only about a quarter of the inventory is houses that are actually completed and for sale, with the remainder representing units under construction or not yet started."
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