More people bought new homes in March, helping to give the battered industry a small lift after the worst winter for sales in almost a half-century. New-home sales rose 11% last month to a seasonally adjusted rate of 300,000 homes, the Commerce Department says. That follows three straight monthly declines. But the pace remains far below the 700,000 homes a year that economists view as healthy. Last year was the fifth consecutive year of declines for new-home sales. Economists say it could take years before sales return to a healthy pace. The median price of a new home rose nearly 3% from February to $213,800. New-home prices are about 34% higher than the median price for re-sales. That’s more than twice the markup in healthy housing markets, making older homes a comparative bargain. Such a disparity is a drag on the economy. New homes represent a fraction of sales but they have an out-sized impact on the broader economy. Each new home creates an average of three jobs for a year and $90,000 in taxes, according to the National Association of Home Builders.
Today’s poll question: When do you expect U.S. new-home sales to reach a healthy level of 700,000 units a year?