WASHINGTON -- After a staggering 74 percent decline from the peak in July 2005, new U.S. home sales appear to be bottoming out.
The pace of home sales, which hit a record-low in January, jumped in February and was flat in March, the Commerce Department said Friday. At the same time, the inventory of new homes for sale dropped a badly needed 5 percent from February levels.
"We believe that the bottom is at hand and that sales will begin turning in the second half of this year," wrote IHS Global Insight economist Patrick Newport.
New home sales fell just 0.6 percent in March to a seasonally adjusted annual rate of 356,000 from an upwardly revised February rate of 358,000. February's results were adjusted upward by more than 6 percent.
The report shows the slide in demand for new homes is ending after more than 40 months of decline, wrote David Resler, chief economist with Nomura Securities.
That's not yet the case for prices.
The median sales price fell to $201,400, a 12 percent drop from a year earlier. Prices are likely to remain weak for months as builders clear out unsold homes.
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