Washington: Purchases of new homes surged in March by the most in almost five decades as buyers rushed to qualify for a government tax credit and the weather turned milder.
Sales climbed 27 per cent, the most since April 1963, to an annual pace of 411,000 that exceeded the highest forecast of economists surveyed by Bloomberg News, figures from the Commerce Department showed on Friday in Washington. Last month's purchase rate was the highest since July and followed a record-low of 324,000 in February that was higher than previously estimated.
Demand may remain elevated through this month as Americans take advantage of a tax credit worth as much as $8,000 before it ends at the end of this week. The outlook for the rest of the year hinges on sustained job gains as homebuilders struggle against a wave of foreclosures that is depressing home prices and adding to inventory. "There's definitely some life out there in the housing market," said Carl Riccadonna, a senior economist at Deutsche Bank Securities Inc. in New York. "It's been bashed so hard during the course of the downturn that we're due for some payback even to get to a more normal level."
Outlook
Economists forecast sales would rise to a 325,000 annual rate in March from February's previously reported 308,000 pace, according to the median of 77 projections in a Bloomberg News survey. Estimates ranged from 300,000 to 362,000.
Orders for durable goods excluding transportation equipment surged in March by the most since the recession began in December 2007, another Commerce Department Friday showed.
The 2.8 per cent increase in bookings for goods meant to last at least three years, excluding cars and aircraft, was four times larger than the median forecast of economists surveyed by Bloomberg News. Total orders unexpectedly dropped 1.3 per cent, depressed by a 67 per cent plunge in demand for commercial aircraft.
Home sales increased in all four regions last month, led by 44 per cent jump in the South. The median price of a new home in the US increased 4.3 per cent in March from a year earlier to $214,000.
