New Home Sales Surge 27%
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Sales of new homes jumped 27 percent in March, after the numbers hit record lows in the prior month as better weather across the country and the winding down of government back tax incentives bolstered sales.
The Commerce Department announced Friday that new home sales increase to a seasonally adjusted rate of 411,000, which is the largest monthly increase in 47 years and easily eclipsed the expectation of economists for a rate of 330,000.
The agency revised the results for February upward to 324,000, which remained an all-time low and were impacted by severe weather across the country.
The median price for sold homes in March was $214,000, up more than 4 percent from the same month last year, but down more than 3 percent from prices in February.
The real estate market is likely benefiting heavily from the government backed stimulus efforts that are set to end on April 30. Buyers are looking to take advantage of the $8,000 first-time homebuyer tax credit and the $6,500 available to those homeowners who move into another property.
The new home sales data reflects the number of contracts signed for new homes to be purchased and not completed sales, so the information gives economists an idea into the number of homebuyers that are in the market during a certain month.
The growth in sales was evident across the nation, led by a 44 percent jump in sales in the South and a 36 percent increase in the Northeast. Sales also rose in the West by 6 percent and by 3 percent in the Midwest.
The number of new home that were available for sale in March dipped 2 percent to 228,000, a supply that would take 7 months to exhaust at the current rate on movement in the industry.
The strong sales number has shares of home builder stocks much higher today. PulteGroup, Inc. (NYSE: PHM) and Lennar Corp. (NYSE: LEN) are setting the pace with six percent gains. Toll Brothers Inc. (NYSE: TOL) is up 3 percent and KB Home (NYSE: KBH) is up 2 percent.
The home builder sector is up 1.5 percent, as represented by today's gain in the SPDR S&P Homebuilders ETF.
The Commerce Department announced Friday that new home sales increase to a seasonally adjusted rate of 411,000, which is the largest monthly increase in 47 years and easily eclipsed the expectation of economists for a rate of 330,000.
The agency revised the results for February upward to 324,000, which remained an all-time low and were impacted by severe weather across the country.
The median price for sold homes in March was $214,000, up more than 4 percent from the same month last year, but down more than 3 percent from prices in February.
The real estate market is likely benefiting heavily from the government backed stimulus efforts that are set to end on April 30. Buyers are looking to take advantage of the $8,000 first-time homebuyer tax credit and the $6,500 available to those homeowners who move into another property.
The new home sales data reflects the number of contracts signed for new homes to be purchased and not completed sales, so the information gives economists an idea into the number of homebuyers that are in the market during a certain month.
The growth in sales was evident across the nation, led by a 44 percent jump in sales in the South and a 36 percent increase in the Northeast. Sales also rose in the West by 6 percent and by 3 percent in the Midwest.
The number of new home that were available for sale in March dipped 2 percent to 228,000, a supply that would take 7 months to exhaust at the current rate on movement in the industry.
The strong sales number has shares of home builder stocks much higher today. PulteGroup, Inc. (NYSE: PHM) and Lennar Corp. (NYSE: LEN) are setting the pace with six percent gains. Toll Brothers Inc. (NYSE: TOL) is up 3 percent and KB Home (NYSE: KBH) is up 2 percent.
The home builder sector is up 1.5 percent, as represented by today's gain in the SPDR S&P Homebuilders ETF.
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