Housing

March New Homes Sales Collapse

home prices
Source: Thinkstock
The U.S. Census Bureau Wednesday morning released data on new single-family home sales for March. Sales fell 14.5% month-over-month to a seasonally adjusted annual rate of 384,000 from an upwardly revised February sales figure of 449,000. The revised February estimate added 9,000 sales from the original estimate of 440,000.

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.

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