New-Home Sales Hit 16-Year Low

New-homes sales fell 8.5% in March to the lowest level since October 1991, and it appears that homebuyers are taking advantage of lower prices on existing homes. The U.S. Census Bureau reported that sales of new single-family homes fell from a seasonally adjusted annual rate of 575,000 in February to 526,000 in March. (The February sales number was revised downward from 590,000.) The March decline was the steepest since November and has "erased" any perception that new-home sales are bottoming, according to Adam York, an economic analyst at Wachovia Corp. "Look for further declines into the summer months," he said. Stephen Stanley, chief economist of RBS Greenwich Capital, noted that builders were quick to cut prices on their inventories last year, but he said existing homes are catching up and it is reflected in the sales numbers. "Over the past six months or so, existing-home sales are down 3.5%, while new-home sales have plummeted by 24%," Mr. Stanley said. The Census Bureau, an agency of the Commerce Department, can be found online at http://www.doc.gov.