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US new home sales surge in March

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Washington (AFP)

US new home sales leapt to a four-month high in March, and sales in the prior months were revised up to reverse the initial weakness, according to government data released Tuesday.

The result suggested the housing market is tightening further, as supplies winnow and prices rise.

But the jump in March in the highly volatile figures was entirely driven by sales in the West, with home-buying stagnating or falling in the rest of the country.

The total sales of newly-constructed houses rose four percent to an annual rate of 694,000 units, seasonally adjusted, the highest level since November and handily overshooting economists' expectations.

The results for January and February, which had shown a steady weakening, were upgraded by a combined 71,000 units, turning what had been two months of declines into three months of gains.

Sales jumped 28.3 percent in the West to an annual rate of 222,000 units, but they plunged 54.8 percent in the wintry Northeast. Elsewhere sales rates were little changed.

Officials caution however that the monthly figures are subject to significant revision and the March figures were all well within broad margins of error.

The median new home price rose 3.5 percent to $337,200, the highest since December, while the average price moderated by 0.2 percent to $369,900, pointing to somewhat cooler prices at the higher end of the market.

Meanwhile, despite the robust sales activity, the stock of homes for sale was unchanged from February at 301,000 units as new homeowners snatched up houses as fast as builders could add them to the market.

But the new sales pace put supplies at only 5.2 months, down 3.7 percent from March and the lowest since November.

Builders have reported for months difficulty finding enough workers to keep up with their projects, which could hamper the pace of construction.

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