March revealed interesting tendency and a sign that the U.S. housing market is struggling to regain strength: sales of new homes went down while prices remained high.
The Commerce Department said that sales of new single-family homes were down 14.5% from February to a seasonally adjusted annual rate of 384,000. Compared to the same time last year, the sales have dropped by 13.3%.
Various economists predicted that sales would hit 450,000 rate in March, but the present situation is rather disappointing. In fact, last month marked the lowest annual pace since July 2013.
As expected, the unusually harsh winter is to blame for the stalled construction industry. The housing sector is still trying to recover as is the labor market.
Asked by the Wall Street Journal, Stephen Stanley, Pierpont Securities chief economist, commented:
“As a result, new-home inventories were still unusually light, and shoppers have less to choose from,” he said. “But, as far as I can tell, builders are still intent on getting more new homes on the market ASAP.”
Read the full story at The Wall Street Journal.