New Home Sales Down 14.5% in March
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iStock/Thinkstock(WASHINGTON) — For the second month in a row, the number of Americans purchasing new homes has taken a plunge.
The Commerce Department reported on Wednesday that sales of newly-built homes dropped more than 14 percent in March to the lowest rate since July of last year.
“[It’s a] bit of a surprise that it dropped so severely after we’ve gotten past most of the weather effects,” says David Crowe, chief economist for the National Association of Home Builders.
Compared to a year ago, new home sales are down sharply — 13.3 percent.
Crowe says changed requirements for mortgages may be behind the drop.
“We’ve had tightened mortgage standards. We’ve had new requirements put in place as a result of legislation that was passed a couple of years ago, and the result has been blocking out a fair number of potential home-buyers. I think that’s the primary reason behind the dramatic fall,” he explains.
He says he expects a decent return for the rest of 2014, “but it does depend heavily upon Congress coming up with solutions to how the federal government backs mortgages.”
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