New home sales rose for the third straight month in March, a sign of strong demand despite rising prices and limited inventories.
Purchases of new, single-family homes, which account for a narrow slice of all U.S. home sales, increased to a seasonally adjusted annual rate of 621,000 last month, up 5.8% from February, the Commerce Department said Tuesday. That was the strongest level since July, when sales reached a 9-year high.
Economists surveyed by The Wall Street Journal had expected sales to fall to a 582,000 pace last month.
Compared with a year earlier, sales were up 15.6%.
The U.S. housing market picked up steam toward the end of 2016, momentum that carried into the early months of this year.
Sales of existing homes, the bulk of the market, climbed to their fastest pace in a decade last month, the National Association of Realtors said last week.
Strong sales growth has defied expectations that low inventories and rising prices would constrain the market.
New-home construction has improved steadily over the past six years but remains well short of levels prior to the housing bubble. Over the past year, for example, builders have started construction on almost 792,000 single-family homes. From 1995 to 2000, a fairly normal stretch for the market, the average was 1.2 million a year.
At the current sales pace, there was a 5.2 months supply of new homes on the market in March, Commerce said Tuesday. The number of new homes for sale was the highest since July 2009.
The median sale price for a new home rose 1.2% in March from a year earlier, to $315,000.
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(END) Dow Jones Newswires
April 25, 2017 10:15 ET (14:15 GMT)