Surge in New-Home Sales Signals Reviving Housing Market

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Home sales up for new builds - Gregory Bull
Gregory Bull, AP
By MARTIN CRUTSINGER

WASHINGTON -- U.S. sales of new homes rebounded in March to a seasonally adjusted annual rate of 417,000. The increase added to evidence of a sustained housing recovery at the start of the spring buying season.

The Commerce Department said Tuesday that sales of new homes increased 1.5 percent. The gain brought the level higher than February's pace of 411,000, though below January's 445,000 -- the fastest pace since July 2008.

The median price of a new home rose to $247,000 in March. That's 3 percent higher than a year ago.

New-home sales are still below the 700,000 pace considered healthy by most economists. But the pace has increased 18.5 percent from a year ago. And most economists see more gains ahead.

Steady job creation and near-record-low mortgage rates are spurring more Americans to buy houses. The rise in demand is helping to boost sales and prices in most markets. Higher prices tend to make homeowners feel wealthier and encourage more spending.

A limited supply of available homes has held back home sales of previously occupied homes. Those sales dipped in March from February, according to the National Association of Realtors.


But sales of previously occupied homes were 10.3 percent higher in March than a year earlier. And the supply of homes increased for the second straight month after eight months of declines. That increase suggests more sellers are confident that the recovery will continue and they can sell at a good price.

Low inventories of existing homes have helped drive more construction of new homes.

U.S. homebuilders started work on more than 1 million new houses and apartments in March at a seasonally adjusted annual rate, the first time it had crossed that threshold in nearly five years. That reflected a surge in volatile apartment building.

Single-family home construction fell in March after reaching the fastest in nearly five years.

Still, a low supply of homes for sale is just one of several constraints that could limit sales. Since the housing bubble burst more than six years ago, banks have imposed tighter credit conditions and required larger down payments.

That has made it harder for first-time homebuyers to qualify for the super-low mortgage rates that have resulted from the Federal Reserve's efforts to ease credit.


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17 Comments

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Selda Kırkan

Another great news about the housing market. The market has been recovering pretty fast in high demand areas like Miami, Miami Beach with the help of foreign buyers.

Selda
http://miamirealestateinc.com

June 06 2013 at 12:43 PM Report abuse rate up rate down Reply
savemore99

Good News for Real Estate Industry !!!!!

April 24 2013 at 11:28 PM Report abuse rate up rate down Reply
nonucantmakemee

who do you think you are kidding? things wont improve till they throw o b a m a out

April 24 2013 at 9:23 PM Report abuse +1 rate up rate down Reply
Jennifer Wenner

I hope things keep moving up. Finger's crossed

April 24 2013 at 4:37 PM Report abuse rate up rate down Reply
paddleman1928

I would wait till Obamacare kicks in-housing prices will go down

April 24 2013 at 4:37 PM Report abuse +1 rate up rate down Reply
mfs171

Decent homes in Palm Beach County that are priced under $250,000 are being sold as quickly as you can list them. My most recent listing had 8 offers the first day. While the recovery has not hit and may never hit some areas, there are areas all over the Country that are rebounding at a scary pace. 28% here in the last year alone. Many of these sales are investor driven so as prices continue to rise the prices will begin to level off...The last thing we need is another bubble..

April 24 2013 at 3:57 PM Report abuse +1 rate up rate down Reply
1 reply to mfs171's comment
mfs171

Sorry,meant to say as prices begin to rise demand will slow and prices will level off..

April 24 2013 at 3:59 PM Report abuse rate up rate down Reply
cgino

I don't know where this is occurring but it sure isn't in Va Beach, Va. I am seeing homes continue to decline to the point of being stupid. When you can buy a condo for 40K because it has depreciated 70% in less than two years, this is not good! New home sales are ridiculously expensive and out of reach of the average income family. Most new construction going on is multi-unit apartment buildings. Sounds like more misinformation by the gov. to get people to buy even though the market is stalled. Most homes I see are being taken off the market instead of being sold. Just can't buy this line of crap when my eyes are telling me different.

April 24 2013 at 1:58 PM Report abuse rate up rate down Reply
Cate

Not to mention the stock market scam that is going on.

April 23 2013 at 5:03 PM Report abuse +2 rate up rate down Reply
Cate

What a scam. I worked in New Home Sales and March is always a big month. 700K homes under what is considered healthy and they are printing that there is a recovery. New York is about to take over the #1 spot for foreclosures because of the state laws preventing a fast rush on them.

April 23 2013 at 5:02 PM Report abuse +2 rate up rate down Reply
old timer

not going to fall into that trap again. lots o buyers lost tons of money 6 years ago / tons and tons

April 23 2013 at 2:48 PM Report abuse +1 rate up rate down Reply