Sales of newly-constructed homes throttled to the highest in nearly a year in March as the housing recovery picked up steam.
New-home sales ran at a seasonally-adjusted annual rate of 621,000, the Commerce Department said Tuesday. That was 5.8% higher than a downwardly-adjusted February sales pace, and 15.6% higher than a year ago.
The March reading was the second-strongest since early 2008, just behind the 622,000 pace of sales notched last July. It easily beat the median forecast of a 580,000 rate from economists surveyed by MarketWatch.
The government’s new-home data are often heavily revised, and there were a net 43,000 additional homes reported sold in prior months in March.
In March, the median sales price was $315,000, up 7.5% from last month, but only 1.2% higher compared to a year ago. At the stronger pace of sales, it would take 5.2 months to exhaust available supply, a bit leaner than the 5.4 months in February.
Demand for housing has strengthened since the recession, and many analysts believe the slower pace of home building should be quickened. But home builders have faced multiple headwinds, including scarcer labor and more expensive lots.
Recently, another challenge has emerged. The Trump administration said Monday it would retroactively slap a tariff on the softwood lumber exported by Canada that’s used to construct single-family homes. Lumber prices have already soared to fresh highs.
The National Association of Home Builders estimates that the increased duty would cause the price of the average home to increase $1,236. It could also have a broader economic impact: the industry group believes more than 8,000 jobs could be lost and single-family construction could be reduced by over $945 million.
On Tuesday, home builder Pulte Group
reported earnings that slightly missed Wall Street expectations. Management said orders grew 8.4% during the quarter, a slight deceleration from the 15% growth rate the company reported last quarter.