Figures from the Commerce Departent showed today that new-home sales, tabulated when contracts are signed, climbed 11.1 percent to a 300,000 annual pace, faster than forecasted. The median estimate in a Bloomberg News survey called for a rise to 280,000. Housing prices fell from a year ago, down 21.9 percent.
The market for new homes is being squeezed by competition from previously owned homes and a deluge of foreclosed properties, even though inventories of new houses are at a 43-1/2 year low.
A report last week showed there were 3.55 million previously owned homes on the market in March, well above the economy's natural rate of between 2 million and 2.5 million.
When foreclosed homes and those that are highly delinquent are taken into account, economists say supply is anywhere in the range of 8 million to 9 million.
The median sales price for a new home rose 2.9 percent last month to $213,800 from February. Compared with March last year, the median price fell 4.9 percent.