The number of newly built, single-family homes on the market declined for a 23rd consecutive month in March as builders focused on working through the inventory of unsold homes, according to new-home sales data reported by the US Commerce Department. The inventory shrank to 311,000 units, which is a 10.7-month supply at the current sales pace.
“Builders are doing a great job of thinning the supply of unsold homes and positioning themselves for a slow but steady housing recovery,” noted NAHB Chairman Joe Robson. “The March numbers are a welcome sign that the market is stabilizing as some of the best home buying conditions in a lifetime are drawing consumers off the fence and back into the market.”
The latest government data indicated that new-home sales in March remained virtually on pace with a relatively strong, upwardly revised figure from the previous month. Sales were reported at a seasonally adjusted, annual rate of 356,000 units, which was off just 0.6% from February.
“In line with NAHB’s forecasts, we continue to see evidence that the new-home sales market is bottoming out as historically low mortgage rates, attractive home prices and incentives like the newly created $8,000 first-time home buyer tax credit spur more interest among consumers,” said NAHB Chief Economist David Crowe.
“That’s particularly true in the West,” he said, “where a 15% gain in March can be attributed in part to California’s implementation of an up-to-$10,000 tax credit for buyers of newly built homes — which, when combined with the federal first-time buyer credit, creates a sizable inducement to purchase.”
Regionally, new-home sales activity was somewhat mixed in March, with the two largest markets posting the best results. The West registered a 15.1% gain, while the South held even with the previous month’s improved sales pace, the Midwest posted a 7.8% drop and the Northeast experienced a 32% decline.