New homes sales in March shot up 27 percent from their record lows in the previous month, as home buyers rushed to take advantage of the government’s purchase credit before it expires at the end of this month.
Sales rose to a seasonally adjusted annual rate of 411,000, the biggest monthly jump in 47 years and the strongest month since July, the Commerce Department said this morning.
The sales figure blew past forecasters’ estimates, which expected an annual sales rate of 330,000.
The other good news is that the median sales price of a new home rose slightly compared with last year, up 4 percent to $214,000.
The downside to this good news is that the housing market remains in distortion, thanks to the continued government incentives. We won’t get a clean number on home sales until June, because May will be the first month when homes are sold without any sort of government incentives (assuming that Congress does not extend the credit again).
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Economy Watch – New home sales in March rocket past expectations
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