UPDATED -- Sales of new single-family homes in the U.S. plunged during March, hitting it lowest level since July and marking the third decline out of the last six months.
A new U.S. Commerce Department report shows a 14.5% decline from February, hitting an annual rate of 384,000 homes, following last month’s figure being upwardly revised to 449,000. The March sales figure is 13.3% below the level from the same time in 2013.
March sales in the Midwest fell 21.5% from February, 16.7% in the West and 14.4% in the South. They rose 12.5% in the Northeast.
“Another disappointing home sales report on the heels of yesterday's decline in existing home sales activity,” said Lindsey Piegza, chief economist for the investment firm Sterne Agee. “Rising prices [up 12.6% in the past year] are becoming problematic. While fueling existing homeowners' confidence with a sizable wealth effect, declining affordability is squeezing many potential home=buyers out of the market.”
She said without income growth or sizable savings to offset the cost increase, home sales are likely to remain tepid, at least in the near term.
Meantime, a separate report shows U.S. Manufacturers indicated a strong start to the second quarter of 2014, with the latest survey highlighting expanding levels of production, new work and employment.
At 55.4 in April, the Markit Flash U.S. Manufacturing Purchasing Managers’ Index was down fractionally from 55.5 in March but still well above the neutral ranking of 50.
“Sharper rates of output and new business growth boosted the Manufacturing PMI during April, while the main negative influence on the headline index was a rise in the suppliers’ delivery times component,” the group said.
April data pointed to a steep and accelerated expansion of manufacturing output levels. The latest increase in production was the fastest since March 2011, with survey respondents mainly citing improving underlying economic conditions and stronger domestic demand.
The latest increase in new orders from abroad was the strongest since August 2013, although export trends remained subdued in comparison to overall new business gains across the manufacturing sector, according to Markit
“This is a domestic-led upturn: although new export orders rose at an increased rate, faster growth of new orders is being driven by surging demand from US markets,” said Chris Williamson, chief economist at Markit. “With new orders growing at one of the fastest rates we’ve seen since the immediate rebound from the 2008-9 recession, further output and employment growth are to be expected in coming months.”
Markit is a provider of financial information services.