March new home sales, up 11.1% from February, remained astonishingly weak on a historical basis. Sales were the lowest March reading on record at an annualized 300,000 units. Sales remain slightly below the January level and were 21.9% below the March 2010 level.
The slight improvement from February pushed the months’ supply of inventory down from 8.2 to 7.3 in March. The ratio remains quite high despite home builders doing a lot in recent years to reduce their inventories. A healthy market has around 4-5 months’ supply.
Reflecting increased sales, the median sales price rose 5.3% from February to $217,200. From a year prior, the median sales price was 4.9% lower.
ABA's Chief Economist Jim Chessen commented that “despite housing being incredibly affordable, new home sales continue to bounce around historic lows. Households remain cautious about the economy and are hesitant to pull the trigger on major purchases, such as a new home.”