New Home Sales Up 2.6% in March

Washington, DC, April 25, 2007--New homes rose in March for the first time in three months, increasing 2.6 percent to an annual pace of 858,000 last month, according to the Commerce Department. February’s pace was pegged at 836,000.

Analysts are saying that the gain may be more a reflection of higher-than-normal temperatures in March than a sign of a recovery in demand. Yesterday the National Association of Realtors reported yesterday the biggest drop in existing home sales since 1989. Those sales are largely based on contracts signed in February, when winter storms dissuaded buyers.

Economists had forecast new home sales to increase to an annual rate of 890,000 in March.

The median price of a new home rose 6.4 percent last month to $254,000 from $238,800 a year earlier, today's report showed.

The number of homes for sale at the end of the month rose to 545,000 from 544,000 in February. That left the supply of homes at the current sales rate at 7.8 months' worth, compared with 8.1 months in February, which was the highest in 16 years.

The number of homes completed and awaiting a buyer declined by 1,000 to 178,000 last month.