Inventory of New Homes Continues Shrinking in March

The number of newly built, single-family homes on the market declined for a 23rd consecutive month in March as builders focused on winnowing down their inventories of unsold units, according to the Department of Commerce. Inventory shrank to 311,000 units, which is a 10.7-month supply at the current sales pace.

Further, new home sales in March remained virtually on-pace with a relatively strong, upwardly revised number from the previous month. Sales were reported at a seasonally adjusted, annual rate of 356,000 units, which was off just 0.6% from February.

NAHB Chief Economist David Crowe says the new home sales market is bottoming out as historically low mortgage rates, attractive prices and incentives like the newly created $8,000 first-time home buyer tax credit feed demand.

Regionally, new-home sales activity was somewhat mixed in March, with the two largest markets posting the best results. The West registered a 15.1% gain, while the South held even with the previous month’s improved sales pace, the Midwest posted a 7.8% decline and the Northeast posted a 32% decline.

Craig DiLouie

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