WASHINGTON—Sales of newly built homes fell for the third straight month in March, a sign the housing market is struggling to build momentum in the new year.
Purchases of new, single-family homes fell 1.5% from a month earlier to a seasonally adjusted annual rate of 511,000, the Commerce Department said Monday. Economists surveyed by The Wall Street Journal had expected the annual rate of sales to hit 520,000 in March.
The longer-term trend suggests demand, while high relative to recent years, has been slowing. Sales in the first three months of this year were up just 1.3% compared to the same period in 2015. Still, March’s sales pace put the market on track to beat 2015’s total 501,000 new homes, the highest annual level since 2007.
“While new home sales have lost some luster in recent months, we believe they will reaccelerate as we head into spring season,” said Gregory Daco, an economist at Oxford Economics. He cited solid income growth and pent-up demand as “strong fundamentals” supporting the rebound.
But two commonly cited factors holding back home sales, a lack of inventory and rising prices, appeared to get some reprieve last month.
Monday’s report showed inventory has expanded to its highest level since September. Based on the current sales pace, it would take 5.8 months to exhaust the supply of newly built homes on the market, up from 5.6 months in the prior month. The total number of new homes for sale at the end of the month was 246,000, the highest figure since September 2009.