New home sales down even in the South
Spring often is the best time of year to buy or sell a house. Families ready to relocate begin the hunt for a home.The winter weather is past and builders are increasing inventory. This Spring is atypical: the housing market now is fighting off a difficult, long winter, mortgage rates are climbing, and there is a shortage of properties.The Commerce Department's March figures show sales of new U.S. single-family houses fell to their lowest level in eight months. Compared to March last year, sales were down 13.3%, the largest year-on-year decline since April 2011. A report from the Mortgage Bankers Association shows applications for loans to purchase houses fell last week.Even as new home sales dropped, the median price of a new home rose to $290,000. That's up 12.6% from March 2013. The rising cost of a new house has forced some buyers at the lower end of the market to back off. New home buyers at the upper end are still buying. Another issue creating the decline in new home sales is inventory. There are fewer houses for sale. Typically, in a healthy market there is a six-month supply of existing properties; right now, there is a 5.2 month supply. The National Association of Home Builders/Wells Fargo builder sentiment index stands at 47. A reading below 50 indicates more builders view sales conditions as poor.The new home sales plunge applies to the South, Midwest, and West; only the Northeast shows a rebound because the winter curtailed purchases.