Washington, DC, Apr. 26--Sales of new homes rose to a record 1.228 million annual rate in March, exceeding forecasts, as cheap financing and an improving job market persuaded Americans to invest in real estate.
Single-family home sales rose 8.9 percent from a revised 1.128 million annual pace in February, the Commerce Department said in Washington. New home sales reached an all-time high of 1.085 million in 2003.
Mortgage interest rates last month approached four-decade lows and companies added the most workers to their payrolls than at any time in almost four years. Builders such as Centex Corp. and D.R. Horton Inc. are confident rising employment will underpin sales, boosting the economy. A measure of the supply of homes for sale fell to the lowest since August.
Economists had forecast sales would rise to a 1.173 million annual rate from a previously reported 1.163 million pace a month earlier, according the median of 56 economists surveyed by Bloomberg.
New home sales account for 15 percent of the market and are considered a harbinger of the resale market for previously owned homes. New home sales are counted when a contract is signed, while resales are tabulated at the contract's close. A report on existing home sales is due tomorrow from the National Association of Realtors.
The median price of new homes fell last month to $201,400 from $210,000 in February. Prices rose 8.8 percent in the last year. The number of new homes for sale fell to a 3.7-month supply in March, the lowest since August, from 3.8 months.
