WASHINGTON, April 24, 2008 (AFP) – Sales of new US homes plunged to their lowest level in over 16 years in March despite hefty price declines in response to a glut of unsold homes, Commerce Department data showed Thursday.
The grim monthly report follows a key industry survey this week showing sales of existing homes, the largest sector of the market, slid further in March, deepening the worst housing sector slump in decades.
Most analysts say the market has not yet reached bottom after the collapse of a boom market two years ago that has weakened the economy and cost banks billions of dollars in mortgage-related losses.
The Commerce Department reported March new home sales fell 8.5 percent to a seasonally adjusted annual pace of 526,000 units, well below analysts’ consensus forecast for a rate of 580,000.
The March sales pace was the weakest since October 1991 and 36.6 percent below the March 2007 estimate of 830,000.
Sale prices marked double-digit declines. The median price was down 13.3 percent year-over-year at 227,600 dollars, the largest 12-month decline since 1970. The average price was 292,200 dollars, down 11.3 percent over the last year, a new record 12-month decline.
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