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Single-family Home Sales Come Up Short

house-graphdownNew single-family home sales fell short of expectations in March 2016, falling for the third consecutive month, according to data released Monday from the U.S. Census Bureau and HUD.

According to data estimates from the U.S. Census Bureau and HUD, new single-family home sales in March 2016 were at a seasonally adjusted annual rate of 511,000, down 1.5 percent from the revised February rate of 519,000. However, new home sales are up 5.4 percent from the March 2015 estimate of 485,000.

The Bureau and HUD also reported that the median sales price of new houses sold in March 2016 was $288,000, down from $297,400 in February and $293,400 last March. The average sales price was $356,200 in March.

sales_mar

Source: NAHB

"It is encouraging that the median new home price declined from February and relative to last March.  This decline represents a shift in product being offered toward more affordably priced entry-level homes," said Realtor.com Chief Economist Jonathan Smoke. "To see growth in the new home market, we will have to see more offerings that appeal to the first-time buyer."

On the upside, inventory looked promising in March, reaching the highest level since September 2015. The number of homes for sale in the U.S. rose month-over-month and year-over-year.

The seasonally adjusted estimate of new houses for sale at the end of March was 246,000, which represents a supply of 5.8 months at the current sales rate. In February, inventory stood a 241,000 (5.6 months supply), and last March, inventory was at 205,000 (5.1 months supply).

"Persistently low inventory of existing homes is making it difficult for homebuyers to find properties to buy, and pushes prospective buyers away from existing homes towards new homes. This allows builders to sell more new homes that haven’t yet been built," said Ralph B. McLaughlin, Chief Economist at Trulia.

Smoke noted that today's report "reveals little solid evidence regarding any changing trends from what happened in February and even from what happened in March last year in the new home market. As we have become accustomed to see in the new home sales reports, the underlying survey data for March were once again so statistically limited that the headline decline in sales should be taken with caution. This has been true for every month this year."

 

Click here to view the Bureau and HUD's full report.

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