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US New Home Sales Tumble 14.5% in March

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US New Home Sales Tumble 14.5% in March

The sale of new US homes declined further in March, a sign the housing recovery continues to be dampened by stricter lending terms and rising prices.

New US home sales declined 14.5 percent in March to a seasonally adjusted annual rate of 384,000, the Commerce Department reported today in Washington. This follows a revised gain of 449,000 in February. A median estimate of market analysts called for 450,000.

New home sales are used to gauge the underlying performance of the US economy. Because home buyers spend money on furnishings and financing, higher home sales are typically associated with higher demand for goods and services.

Compared to year-ago levels, new home sales were down 13.3 percent. The median sales price of a new US home sold in March was $290,000. The average sales price was $334,200, official data showed. There were 193,000 new homes for sale at the end of March. At the current sales rate, this represents a supply of 6 months.

The report comes one day after the National Association of Realtors said previously-owned home sales declined 0.2 percent in March to a seasonally adjusted annual rate of 4.59 million, a 20-month low.

Severe weather this winter weighed on an already struggling housing sector. Latest data suggest demand will be slow to pick-up after the weather-induced slowdown, as prospective buyers contend with higher mortgage rates and rising home prices. According to Freddie Mac, the average interest rate for a 30-year fixed mortgage was 4.27 percent last week, up from 3.45 percent a year earlier.

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