New home sales surged 20.7% in March

WASHINGTON — Sales of new homes surged 20.7% in March to the highest level since 2006, rebounding from a sharp decline the previous month when severe winter storms wreaked havoc in many parts of the country.

Sales climbed to a seasonally adjusted annual rate of 1.02 million last month after a 16.2% tumble in February, the Commerce Department reported Friday. It was the fastest pace for new home sales since the housing boom of the mid-2000s when sales reached 1.04 million units in August 2006.

The median sales price of a new home sold in March was $330,800, up only 0.8% from the median sales price a year ago.

The big jump in new home sales stands in contrast to sales of existing homes, which fell for a second consecutive month in March, a drop that was blamed on a lack of supply which has pushed exiting home prices to new highs.

Housing has been one of the bright spots over the past year as the country was hit by a global pandemic which resulted in the loss of millions of jobs and prompted Congress to approve a series of relief measures totaling more than $5 trillion.

Analysts believe that the housing industry will have another good year in 2021, supported by ultra-low mortgage rates, but they expect the growth will moderate somewhat as home builders struggle with such problems as a surge in lumber prices, a shortage of construction workers and a lack of available building lots.

The inventory of unsold new homes stood at 307,000 in March, unchanged from February, but down 7% from a year ago.