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Economy in Brief

New Home Sales Surged Unexpectedly
by Tom Moeller April 26, 2006

Last month new home sales showed surprising resilience with a 13.8% jump to 1.21 million (SAAR), the highest level this year. The jump contrasted to Consensus expectations for a more moderate increase to 1.115M and a 10.9% drop during February was little revised.

Despite last month's increase in sales, the latest level was 11.5% below last July's peak and sales during the first quarter were 9.4% below the 2005 average.

On the up trend has been the number of homes up for sale. That figure rose 2.8% last month and it's up by nearly one quarter during the last twelve months. Most pronounced is the 60.6% y/y gain in homes for sale in the Northeast.

Gains in March sales throughout the nation were robust but most pronounced was a 35.7% (-13.1% y/y) jump out West which recovered about all of the prior month's plunge. Sales in the Midwest also were strong and rose 10.9% (-8.9% y/y) while sales in the Northeast rose 4.7% (-15.2% y/y). The 6.9% gain in sales down South (-2.3% y/y) recovered nearly all of the declines during the prior two months.

Prices were under pressure as suggested by a 6.5% (-2.2% y/y decline in the median sales price. The average sales price fell 7.1% (-3.6% y/y) suggesting either more price discounting of large homes or greater sales declines of large homes.

U.S. New Homes Mar Feb Y/Y 2005 2004 2003
Total Sales (AR, 000's) 1,213 1,066 -7.2% 1,279 1,200 1,091
Median Price (NSA) $224,200 $239,900 -2.2% $234,208 $217,817 $191,383
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