Sales of newly built, single-family homes fell 14.5 percent to a seasonally adjusted annual rate of 384,000 units in March, according to data released by the U.S. Department of Housing & Urban Development (HUD) and the U.S. Census Bureau.
"We keep hearing from our members that tight credit conditions are preventing many first-time buyers and younger families from being able to buy a home," said Kevin Kelly, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Wilmington, Del. "Congress must outline a clear policy on housing finance so that qualified buyers can get home loans. Otherwise, this continued uncertainty could threaten the housing recovery and overall economy."
"Overly stringent underwriting standards for mortgages have had a detrimental effect on modest-priced markets and have hit first-time homebuyers particularly hard," said NAHB Chief Economist David Crowe. "As a result, most of the sales are coming from a smaller pool of buyers who have a more established credit history, are more likely to finance with higher cash downpayments and are purchasing higher-priced homes."
Regionally, sales in March fell 21.5 percent in the Midwest, 14.4 percent in the South and 16.7 percent in the West. The Northeast was the exception to the rule, with a 12.5 percent increase.
The inventory of new homes for sale edged up to 193,000 units in March, which is a six-month supply at the current sales pace.
“The sharp decline in March’s new home sales is further evidence that winter weather is not the catalyst for the sluggish housing data the past few months," said Quicken Loans Vice President Bill Banfield. "The rise in interest rates and prices of new homes is leaving some potential buyers with sticker shock and ultimately prolonging their home search process.”