Sales of new single-family homes rose 7.3 percent in March to surpass the million-unit mark for the sixth time on record and almost completely offset declines registered in the first two months of the year, according to Commerce Department figures. Commerce also reported substantial upward revisions to its home sales figures for January and February.
“Taken together, home sales for this year's first quarter — and the healthy inventory reading accompanying today's report — provide welcome reassurance of housing's continued vitality and its role as a crucial stabilizing force in the nation's economy,” said Kent Conine, president of the National Association of Home Builders (NAHB) and a home and apartment builder from Dallas.
NAHB Chief Economist David Seiders noted that the housing component of GDP grew 12 percent in this year's first quarter — faster than any other part of the economy. “Residential fixed investment accounted for fully one-third of total GDP growth in 2003's first quarter, even more than the substantial support it provided in 2002,” he said.
New-home sales reached an exceptionally strong seasonally adjusted annual pace of 1.01 million units in March, Commerce reported. Regionally, the Northeast led the rebound with a nearly unheard-of 82.5 percent gain to a seasonally adjusted annual sales pace of 104,000 units. “This very strong number undoubtedly reflects a surge of pent-up demand following harsh winter weather in the previous months,” said Seiders.
Starts gained nearly 16 percent in the southern region, where weather also played a key role in previous declines. The West remained virtually unchanged, with a 0.4 percent gain, while the Midwest registered a 26.4 percent decline following a big gain in the previous month.
The inventory of unsold new homes declined 1.5 percent in March to 339,000 units, which is a 4.1 month supply at the current sales pace.
“This healthy inventory picture, combined with today's positive report from the University of Michigan on consumer sentiment in April, NAHB's latest builder surveys revealing stability in the marketplace, and the maintenance of historically low interest rates all bode well for housing heading into the second quarter,” Seiders said. “With these factors in mind, we now believe that new-home sales for all of 2003 will likely be right on par with last year's record-breaking 974,000 units.”