The drumbeat of positive news in the housing market continued for a second day, as sales of new homes in March had its biggest monthly jump in 47 years, the Commerce Department reported Friday, April 23.
Sales soared 27%, the biggest since a 31% gain in March 1963, as buyers were spurred by a government tax credit that expires at the end of this month. Sales of new homes increased in March to a seasonally adjusted annual rate of 411,000, the highest since July, and followed a rise of 324,000 in February.
The government extended an $8,000 tax credit to first-time home buyers in November and expanded it to include some current owners, who could get a credit of up to $6,500. The deadline for signing contracts is the end of April, and the sales must be completed by June 30.
Economists like Lawrence Yun of the National Association of Realtors (NAR), which reported Thursday that sales of existing homes rose 6.8%, have pointed to the tax credit with spurring purchases. “The home buyer tax credit has been a resounding success,” Yun said Thursday.
Sales rose in all four regions of the U.S. last month, led by a 44% jump in the South and 36% climb in the Northeast. The median price of a new home rose 4.3% in March from the same month a year earlier, to $214,000.
Read the full version of the Commerce Department’s report on new home sales.