“With March sales gaining in every region except the South, the data are another reminder that activity readings in January/February were restrained by severe weather. Builder sentiment data and mortgage purchase applications have shown no collapse or subsequent surge,” said Steven Wieting, an economist at Citi.Adding to the not-so-rosy cast to this figure is the fact that the average sale price fell 3.8% from a year ago, although it rose 2.9% from February's revised figure. Inventories, though, shrunk to their lowest level since 1967.
But by region, sales are between 9.1% and 34% worse than the same period last year. The still-high unemployment rate, a glut of cheaper existing homes on the market and the large number of underwater mortgages have all combined to depress the market for new homes.
“Distressed sales continue to rob demand from new home sales and construction activity,” said Yelena Shulyatyeva, an economist at BNP Paribas.
It makes for a mixed report, whose bright spots are treated skeptically by the associated article. Evident is a two-tier market, where new-home sales recover while used-home sales languish. That's a healthy development, because it signifies the house returning to its old-time status as a durable consumer good rather than a speculation vehicle. For durable consumer goods, new is better than used.
The gold market seemed to take a little heart from the news after tumbling to the low 1500s at 9:45. That tumble was prompted by a recovery in the greenback. Sadly, the bump-up at the time of the figures' release proved to be only a relief rally. Gold has another stumble to go before it bottomed at $1,502. Needless to say, earlier support at $1,510 has evaporated.