New home sales down in March
WASHINGTON – April 23, 2014 – Sales of newly built, single-family homes fell 14.5 percent to a seasonally adjusted annual rate of 384,000 units in March, according to data released today by the U.S. Department of Housing and Urban Development (HUD) and the U.S. Census Bureau.
The decline represents an eight-month low, and it disappointed economists who predicted, on average, an increase to 450,000.
On a year-to-year comparison, sales dropped 13.3 percent for the largest decline since April 2011.
"We keep hearing from our members that tight credit conditions are preventing many first-time buyers and younger families from being able to buy a home," says Kevin Kelly, chairman of the National Association of Home Builders (NAHB). "Congress must outline a clear policy on housing finance so that qualified buyers can get home loans. Otherwise, this continued uncertainty could threaten the housing recovery and overall economy."
Regionally, sales in March fell 21.5 percent in the Midwest, 14.4 percent in the South and 16.7 percent in the West. The Northeast was the exception to the rule, with a 12.5 percent increase.
The inventory of new homes for sale edged up to 193,000 units in March for a six-month supply at the current sales pace.
"Overly stringent underwriting standards for mortgages have had a detrimental effect on modest-priced markets and have hit first-time home buyers particularly hard," says NAHB Chief Economist David Crowe.
As a result, he says the pool of new homebuyers today is fairly small. Most have "have a more established credit history, are more likely to finance with higher cash downpayments and are purchasing higher-priced homes."
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