New home sales explode 27% in March
* New home sales exploded to the upside, soaring 26.9% in March. That's good for a seasonally adjusted annual rate of 411,000 in March, compared with an upwardly revised 324,000 in February. That was also a blow out compared with the 325,000 average forecast -- and the biggest rise in ANY month since April 1963.
* Regionally, sales surged 35.7% in the Northeast and 43.5% in the South. They also gained 4.3% in the Midwest and 5.7% in the West.
* The raw number of homes for sales fell to 228,000 from 233,000 in February. That's the lowest level going all the way back to March 1971. Compared with a year earlier, supply was down 27.2%. The months supply at current sales pace indicator of inventory plunged to 6.7 from 8.6. That's the lowest since December 2006.
* Median prices fell 3.4% to $214,000 from $221,600 a month earlier. On a year-over-year basis, prices were up 4.3%.
I was adamant a year ago that many of my housing market indicators were suggesting a turn was at hand. Not a massive recovery, but a gradual improvement in market conditions. I also argued that more than the tax credit was at work. Cheap homes, low mortgage rates, and a slow-but-steady turn in consumer confidence and employment were helping underpin housing demand.
Fast forward today and all I can say is "Wow!" The March sales figures were an absolute blow out, with sales surging by the biggest margin in 47 years. Inventory for sale declined to the lowest level in almost four decades, while pricing firmed from year-earlier levels. Sure, the tax credit goosed the figures. But again, it is much more than that. In simple terms, housing is a bargain again -- and buyers are responding. That is unambiguously good news for the market going forward.