New Home Sales Rise More than Expected

New Home Sales measures the number of new single-family homes that were sold during the prior month; this report is somewhat strongly correlated to Existing Home Sales. The Survey states that 328 thousand new single-family homes were sold in March. This is better than the 318 thousand expected by analysts. This is essentially bullish for the U.S. housing market. From the report, sales of new single-family houses in March 2012 were at a seasonally adjusted annual rate of 328,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 7.1 percent below the revised February rate of 353,000, but is 7.5 percent above the March 2011 estimate of 305,000. The median sales price of new houses sold in March 2012 was $234,500; the average sales price was $291,200. The seasonally adjusted estimate of new houses for sale at the end of March was 144,000. This represents a supply of 5.3 months at the current sales rate. An increase in new homes sold implies a healthy housing market. According to the multiplier effect, housing has an impact on the rest of the economy. Increases in homes sold suggest increased household income and in turn an economic expansion, and visa versa.