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U.S. New Home Sales Rose in March

WASHINGTON—Purchases of new homes in the U.S. increased in March, driven by sales gains in most parts of the nation.

Purchases of newly built single-family homes—a relatively narrow slice of all U.S. home sales—rose 4.5% to a seasonally adjusted annual rate of 692,000 in March, the Commerce Department said Tuesday. Economists surveyed by The Wall Street Journal had expected a 2.5% decline.

Sales were up 3.0% in March from the prior year. The pace of new-home sales remains well below the elevated levels seen before the 2007-09 financial crisis and recession.

All U.S. regions but the Northeast saw new-home sales gains last month, with purchases in the South reaching the highest level in more than a decade.

In the broader housing market, inventory has been tight, driving a run-up in home prices and keeping some potential buyers out of the market. Meantime, construction-labor shortages and rising input costs are pushing up the overall cost of buying new homes, though prices fell last month.

The months’ supply of new homes for sale on the market was 6.0 in March, up from 5.3 a year ago. With more homes on the market, the median sales price of a new home declined to $302,700, the lowest level in more than two years.

A report that tracks U.S. home building and approvals for new projects showed both dropped in March, continuing a recent weak stretch for new housing construction. Still, a gauge of U.S. home-builder confidence rose in April, the third increase in four months.

Purchases of previously owned homes, which make up the bulk of U.S. homebuying, faltered in March despite lower mortgage rates and a strong job market.

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