Sales of new homes surge 27 percent in March

WASHINGTON - Sales of new homes surged 27 percent last month, bouncing off the previous month's record low and blowing past expectations as government incentives and better weather boosted sales.

The Commerce Department said Friday that new-home sales rose last month to a seasonally adjusted annual sales pace of 411,000, the strongest month since last July and the biggest monthly increase in 47 years.

Economists surveyed by Thomson Reuters had expected a sales pace of 330,000. February's results were revised upward to 324,000 but remained an all-time low. Sales had been especially weak over the winter, partly due to bad weather in much of the country.

The median sales price was $214,000, up more than 4 percent from a year earlier but down more than 3 percent from February.

(Sales in the Northeast, which accounted for 9 percent of all sales, were at a seasonally adjusted annual pace of 38,000, up nearly 36 percent from 28,000 the month before. Ira Tane, president of the Long Island Builders Institute, said that at a recent meeting of the home builders group "there was consensus that things were definitely picking up.")

The new-home sales report reflects signed contracts to purchase homes rather than completed sales and thus gives economists a feel for how many buyers were out shopping for new homes in a given month.

It is likely capturing consumers who are trying to qualify for federal tax credits that will expire at the end of this month. The government is offering an $8,000 credit for first-time buyers and $6,500 for current homeowners who buy and move into another property. - AP