Sales of new homes increased 1.5% in March over February and more than 18% from a year ago. The new numbers, reported by the Commerce Department today (report-pdf), show that housing is likely to remain a driver of economic growth this year.
Most analysts see greater gains ahead, as the spring buying season continues. The only thing holding sales back is the lack of inventory in many of the major markets. The Commerce Department reports that the inventory of new homes on the market rose 2% but the number is still close to record lows.
“The latest sales report is right in line with our forecast for continued, modest increases in home prices and sales through 2013,” said David Crowe, the chief economist for the National Association of Home Builders.
“At this point, we are about half-way back to what would be considered a ‘normal’ level of sales activity as challenges related to supplies of credit, building materials, lots and labor are slowing the pace at which builders can build and sell new homes.”
Photo: 3384 Stone Ridge Lane