Sales of newly built single-family homes rose by 12.2 percent to hit an all-time high seasonally adjusted annual rate of 1.43 million units in March, according to Commerce Department figures.
"This surprisingly good number shows there's still plenty of demand in today's new-home marketplace," said David Wilson, president of the National Association of Home Builders (NAHB) and a custom home builder from Ketchum, ID, U.S. "It may be that higher mortgage rates pushed more fence-sitters to go for it last month, which often happens when further rate gains are expected."
According to the Commerce Department, the number of new homes for sale fell about 1 percent in March, to 3.6 months' supply at the current sales pace.
Three out of four regions posted higher home sales in March, with the Northeast's 9 percent decline being the only exception. Sales gained 22 percent in the Midwest, 13.8 percent in the South and 10 percent in the West.
Commerce also reported substantial upward revisions to its nationwide new-home sales figures for December, January, and February.
"Looking to the future, it will be difficult to sustain as quick a sales pace as we've seen in March," NAHB Chief Economist David Seiders noted. “However, given the fact that long-term mortgage rates have actually fallen since then and that inventories are in such good shape, it's likely that new-home sales for all of 2005 will challenge last year's record 1.2 million units.”
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