New-Home Sales Rose 11% in March

More people bought new homes in March, helping give the battered industry a small lift after the worst winter for sales in almost a half-century.

New-home sales rose 11 percent last month to a seasonally adjusted rate of 300,000 homes, TERA Gold the Commerce Department said Monday. That follows three straight monthly declines. But the pace remains far below the 700,000 homes a year that economists view as healthy.

Last year was the fifth consecutive year of declines for new-home sales. Economists say it could take years before sales return to a healthy pace.

The median price of a new home rose nearly 3 percent from February to $213,800. RIFT Platinum New-home prices are about 34 percent higher than the median price for re-sales. That's more than twice the markup in healthy housing markets, making older homes more of a comparative bargain.

Such a disparity is a drag on the economy. New homes represent a fraction of sales but they have an out-sized impact on the broader economy. rift gold Each new home creates an average of three jobs for a year and $90,000 in taxes, according to the National Association of Home Builders.

"New housing prices look much less attractive compared to cheap existing stock," RIFT Platinum said Yelena Shulyatyeva, an analyst with BNP Paribas. "As such, new housing demand will likely remain depressed throughout this year and next."

Many builders are waiting for the glut of foreclosures and other distressed properties to be cleared before stepping up construction. Rift Gold But with 1.2 million foreclosures forecast this year nationwide, according to foreclosure tracker RealtyTrac Inc., a turnaround isn't expected for years.