Economists had expected a seasonally adjusted annual rate of 455,000 for March, a far cry from what the housing market delivered. The March rate is 13.3% below the rate for March 2013. At the peak in 2005, new home sales posted a seasonally adjusted annual rate of nearly 1.4 million.
The Census Bureau also reported that the median sales price for new homes sold in March was $290,000 and the average sales price was $334,200. At the end of March the number of new homes for sale rose from a February total of 189,000 to 193,000, a supply of six months at the current sales rate.
The median and average prices soared in March. The median price is up $28,200 and the average price rose $17,200. Inventory rose by about 4,000 housing units in March and totaled 22,000 more units for sale than at the end of December.
The price hikes indicate that first-time buyers could be having trouble getting into the market. Tighter lending rules and rising prices have conspired to make it difficult for those who want to own a home to qualify for a mortgage.
Homebuilder stocks reacted badly to the report. Meritage Homes Corp. (NYSE: MTH) dropped more than 5% Wednesday after reporting earnings that missed analysts’ estimates. Year to date, Meritage is down about 9%. Shares traded at $40.62 in a 52-week range of $38.42 to $52.95.
Another homebuilder, PulteGroup Inc. (NYSE: PHM), reports first-quarter results Thursday, and analysts expect earnings per share of $0.20 on revenues of $1.18 billion. The report from the Census Bureau has cast doubt on those estimates. Year to date, PulteGroup shares are down about 7%. In mid-morning trading Tuesday, shares were down 2.25%, at $18.25 in a 52-week range of $14.23 to $24.47.