The sales of new homes in the U.S. rose unexpectedly by 13.8% in March, the largest one-month price gain since April of 1993. The Commerce Department reported last week that the pace of new home sales rose to a seasonally adjusted annual rate of 1.213 million. Most analysts expected only an increase to 1.1 million unit pace. Despite the spike, the report showed that the housing market may be slowing from record peaks. The median home price declined by 2.2% from March 2005 to $224,200. The decline market he first year-over-year decrease since December 2003. When compared to March 2005, this year's sales pace is down 7.2%. Existing home sales were also up for March by 0.3%, which was unexpected, reported the National Association of Realtors last week. The increases are reportedly due to increased buying in less-expensive markets and the warm weather. Analysts say that home sales for the year are 4% below the pace set in 2005, a record year for sales. Analysts believe that rising interest rates will lead to a decrease of 6% this year for existing home sales. David Lereah, chief economist for the NAR, said that the increases are a hopeful sign that sales will only decrease slightly this year. "This is additional evidence that we're experiencing a soft landing," he said. "The market is clearly stabilizing." Lereah said that many booming areas are slowing, while moderate growth areas are experiencing strong gains. |
