Sales of new U.S. homes rose 1.5 percent in March which is a significant gain of 18.5 percent from year ago, while sales of existing homes fell, the Census Bureau and Department of Housing and Urban Development said Tuesday.
The report showed that new home sales rose 1.5 percent to an annual rate of 417,000 in March from the February rate of 411,000. Economists had expected sale to climb to an annual rate of 419,000.
The monthly increase in new home sales in March came after sales tumbled 7.6 percent in February from a four-year high of 445,000 in January.
The pace remained well above the 2012 average of 369,000 units a year, but was constrained by both the supply, which held at 4.4 months' worth available on the market, and still-tight credit conditions.
The median price of single-family new homes sold fell in March to $247,000 from $264,900 the previous month, and was slightly higher than the 2012 full-year average of $245,200.
"High affordability and low interest rates continue to support the ongoing housing sector recovery, but we continue to note that improvement in the housing sector remains quite gradual," said Gennadiy Goldberg, U.S. strategist at TD Securities, according to Market Watch.
Meanwhile, the Federal Housing Finance Agency said prices rose 0.7% in February, or a gain of 7.1% from the same period of 2012. The index is calculated by using the purchase price of houses with mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac.
