Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=220421
Story Retrieval Date: 4/23/2014 11:03:14 AM CST
U.S. Census Bureau and U.S. Department of Housing and Urban Development/Mandy Niad, Medill
New-home sales increased slightly nationwide last month, but fell in the Midwest, the Census Bureau of the Department of Commerce reported on Tuesday.
Existing-home sales, reported Monday, moved in opposite directions, as they fell a bit nationwide, but rose in the Midwest.
Sales of new single-family homes rose to a seasonally adjusted annual rate of 417,000 in March, a 1.5 percent rise from February’s 411,000, and 18.5 percent above the year-earlier rate of 352,000. March’s numbers exceeded the predictions of analysts surveyed by Bloomberg, who were anticipating 416,000.
Jennifer Lee, senior economist at Toronto-based BMO Financial Corp., parent of BMO Harris Bank N.A., said that while the rise to “is good news, the increase wasn’t enough to erase February’s 7.6 percent dive.” Lee noted that the newly-constructed homes inventories rose for the second consecutive month, but they are not far from their record lows. This means that “inventories remain very tight,” according to Lee.
While more houses were sold in the Northeast and South, Midwest and West sales were down from the month prior. In the Midwest, monthly sales plunged 12.1 percent to 51,000, but that still represented a 21.4 percent spike from the same period a year ago. In the West, new-home sales dove 20.9 percent from February to 110,000, yet had the greatest hike of any region from a year earlier, jumping 37.5 percent, more than double the national rate of 18.5 percent.
“Builders have been complaining,” said Mesirow Financial Holdings Inc. economist Diane Swonk in a blog post, “that it is particularly hard to find land, supplies and workers at reasonable prices in parts of the West…. It is still difficult for builders to compete and make much of a profit when existing home prices are still so far off the highs hit during the boom years.”
The previously-reported existing-home sales in the West did move in the same direction as the new-home sales for the region, as they fell 1.7 percent to a rate of 1.18 million in March, yet are 4.4 percent above a year prior.
According to the National Association of Realtors, existing-home sales have continued to exceed year-over-year levels for 21 consecutive months.
The median sales price of new houses sold in March was $247,000, a 3 percent increase from the March 2012 median price of $239,800.
The seasonally adjusted amount of homes for sale in March was 153,000. That represents an inventory supply of 4.4 months at the current sales rate, which remains flat from February’s supply, but is down from the March 2012 supply of 4.9 months.