New home sales surge

Friday, April 25, 2003 | 9:58 a.m.

SUN STAFF AND WIRE REPORTS

Sales of new homes nationwide and in Las Vegas surged in March as cheap financing and better weather lured buyers.

Single-family nationwide home sales jumped 7.3 percent to a 1.012 million annual rate last month from a revised 943,000 rate in February, the Commerce Department said today. March was the sixth month in the past eight for the new-home sales pace to exceed 1 million units, which the industry had never done before last August. Builders are on track to sell 1.043 million houses this year, based on Bloomberg data, exceeding last year's record 974,000.

In Las Vegas there were 1,990 recorded new home sales in March, the highest number of recorded sales of new homes ever tallied for March by Home Builders Research Inc., which tracks local housing statistics.

That compares to 1,651 new home sales in Las Vegas in February. The Las Vegas new home market ended the first quarter in 2003 with 5,189 recorded sales, slightly below last year's first quarter tally of 5,468 recorded new home sales, reported Dennis Smith, president of Home Builders Research Inc.

Mortgage rates fell to the lowest on record last month amid concern the war with Iraq would slow the economy. That helped offset the lowest consumer confidence in nine years, and less stormy weather encouraged home shoppers.

"Low mortgage rates kept buyers signing on the bottom line," said Ian Morris, chief U.S. economist at HSBC Securities USA Inc. in New York. "Any which way to cut it, the housing market overall remains strong."

New homes account for 15 percent of all home sales. Sales of previously owned homes account for the rest. Home building contributes 5 percent of gross domestic product and adds to growth because it creates jobs and encourages spending on appliances, building materials and home furnishings.

Home construction in the first three months this year rose at a 12 percent annual rate, the biggest increase in a year, and contributed 0.53 percentage point to the quarter's 1.6 percent annualized increase in gross domestic product, the Commerce Department said today.

The median price of new homes rose last month to $182,000 from $178,800 in February. Prices were down 0.8 percent in the last 12 months.

The inventory of new homes for sale fell to a 4.1-month supply in March from 4.4, the report showed.