New home sales in March greatly beat market analyst expectation by jumping 11.1% in March from the previous month, according to the Census Bureau
Analysts at Econoday
expected existing home sales to post a 3.7% gain.
The results of the Census survey equate to nearly 300,000 new home sales annualized, still down 84,000 from last year.
New sales of single-family homes fell nearly 17% in February
from a month earlier, coming in well below analysts' estimates and at the lowest level recorded.
The Commerce Department
said the seasonally adjusted rate of 250,000 units last month was considerably lower than 301,000 for January, which was revised upward by 15,000 units. February sales are down 28% from a year earlier.
The seasonally adjusted estimate of new homes for sale was 186,000 in February, representing an 8.9 month supply. A healthy market usually holds a six-month supply.
Econoday states that new home sales measure the number of newly constructed homes with a committed sale during the month. "The level of new home sales indicates housing market trends and, in turn, economic momentum and consumer purchases of furniture and appliances," the economic analytics firm claims.
Meanwhile Capital Economics
said it is hopeful that the increase in new home sales in March marks the end of the downward trend that had taken sales to a record low. "But with existing homes being sold at much more competitive prices, the demand for newly built properties will recover only very gradually," the firm said in a note to clients.
Write to Jacob Gaffney
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