New Home Sales Hits Lowest Level in 16 Years

Sales of new homes plunged in March 2008 to the lowest level in over 16 years as housing slumped further at the start of the spring sales season, as reported by the government last week. The median price of a new home in March, compared to a year ago, fell by the largest amount in nearly four decades. The Commerce Department reported on Thursday that sales of new homes dropped by 8.5 percent last month to a seasonally adjusted annual rate of 526,000 units, the slowest sales pace since October 1991.
The median price of a home sold in March 2008 dropped by 13.3 percent compared with March 2007, the biggest year-over-year price decline since a 14.6 percent plunge in July 1970. The poor news on new home sales followed earlier reports showing sales of existing homes fell by 2 percent in March. Housing, which boomed for five years, has been in a prolonged slump for the past two years.
For March 2008, sales were down in all regions of the country, dropping the most in the Northeast, a decline of 19.4 percent. Sales fell by 12.9 percent in the West, 12.5 percent in the Midwest and 4.6 percent in the South.