Sales of new single-family houses slipped 0.6% in March from February to a seasonally adjusted annual rate of 356,000, according to estimates released Friday by the U.S. Census Bureau and the Department of Housing and Urban Development. The rate was 30.6% below March 2008.
The numbers, though down, were ahead of Wall Street expectations, which were for an adjusted annual rate of 340,000. The Commerce Department data, however, does not take into account cancellations.
The median price also fell, to $201,400 from $208,700 in February, but the average sales price crept up from $255,100 in February to $258,000 in March.The median months-for-sale ticked up from 9.8 months in February to 10.2 months in March. In comparison, the median months-for-sale was 6.2 in 2007 and 9.2 in 2008.
On a positive note, inventory of unsold new single-family homes fell to 311,000 in March from 328,000 in February, a decline of 5.2% to a 10.7 months-supply. The months-supply metric peaked at 14.2 months in January after rising steadily since May, 2008.
Regionally, the Northeast dragged the national average down with a 32.1% month-to-month decline, which put it 32.1% below March 2008. The Midwest also dropped, by7.8%, 32.9% below last year. The South was flat month-to-month and 29.7% below last year's pace and the West was up 15.1% from February but still 33.7% below March of last year.
Not seasonally adjusted, the year-to-date percentage declines compared to last year were greater, down 38.2% nationally, down 36.0% in the Northeast, down 34.0% in the Midwest, down 36.3% in the South and down 45.0% in the West.
Carl Reichardt, home building industry analyst at Wachovia Securities, took a generally positive view of the data in a research note to investors. "We believe that February's upward revision and March's data support our Neighborhood Watch Survey's findings (as well as recently announced comments from public builders) that tract activity has picked up in recent weeks," he wrote. "Sequential unit inventory has declined for 24 consecutive months now and based upon our ratio of completed homes sold to completed homes added, builders are continuing to sell more homes than they are adding to their finished goods inventory. More than two thirds of actual new homes sold in March were below $300K; the median price of a new home now is 15% ($27K) higher than that of a median existing home, the lowest since Fall '08."
James McCanless at FTN Equity Capital Markets pointed out in his research note that March's unadjusted new home inventory was 308,000 homes, a 33.8% decline from 465,000 in March 2008 and down 45.7% from the July 2006 peak. Going forward, he wrote, "Since builders are cutting average home sizes and average prices to compete with foreclosures, we believe the negative Y/Y [year-over-year] comparisons could continue through 2009. The removal of several national foreclosure moratoriums in April and May could exacerbate this trend, and we believe our builders could continue aggressively pricing homes to capture first-time homebuyers taking advantage of the Federal first-time homebuyer tax credit".