New-home sales increased in March to a four-month high, mainly reflecting a surge in the West along with upward revisions to prior months that showed stronger first-quarter demand than previously estimated.
Single-family home sales rose 4% month-over-month to a 694,000 annualized pace (well above an estimate of 630,000), after a 667,000 rate (revised from 618,000) in February. Purchases in the West jumped 28.3% to a 222,000 annualized rate, the fastest since December 2006, according to data released by the Census Bureau and the Department of Housing and Urban Development.
The median sales price increased 4.8% year-over-year to $337,200. The supply of homes at current sales rate fell to 5.2 months from 5.4 months
The March advance and revisions to the previous two months indicate sales were on better footing during the quarter, a sign that elevated prices and mortgage rates at a four-year high are having minimal impact on demand so far.
Firm job growth and still-favorable consumer attitudes about the housing market suggest fundamentals remain sound for residential real estate. At the same time, rising mortgage costs and property price appreciation continues to outpace wage growth, threatening to put homes out of reach for younger Americans and those looking to purchase for the first time.
The number of properties sold in which construction hadn't yet been started rose last month, a sign that developers will stay busy in the coming months.
New-home sales, tabulated when contracts get signed, account for about 10% of the market. They're considered a timelier barometer than purchases of previously owned homes, which are calculated when contracts close and are reported by the National Association of Realtors.
The Realtors' data on Monday showed existing-home sales increased more than expected despite a shortage of listings, as condominiums and higher-priced homes boosted activity.
By region, sales rose 0.8% in South to 371,000, but purchases dropped in the Midwest and Northeast. The Commerce Department said there was 90% confidence that the change in sales last month ranged from a 14.6% drop to a 22.6% increase, underscoring the volatility of the data.