U.S. housing sales soar in March

U.S. home sales rose more than expected in March, reversing three months of decline, as government incentives drew in buyers and kicked off what's expected to be a strong spring selling season.

Sales of previously occupied homes rose 6.8 per cent to a seasonally adjusted annual rate of 5.35 million last month, the highest level since December, the National Association of Realtors said Thursday. February's sales figures were revised downward slightly to 5.01 million.

"The spring selling season will be a success and probably the most active we're seen in years," said Stuart Hoffman, chief economist at PNC Financial Services Group.

Sales had been expected to rise 5.2 per cent to 5.28 million, according to economists surveyed by Thomson Reuters.

Federal help

The results show the housing market is stabilizing after a devastating bust. But the true test will be whether the market can stand on its own after federal tax credits expire at the end of this month.

Sales rose in every region, surging more than seven per cent in the Midwest and South, 6.6 per cent in the West and six per cent in the Northeast.

"It's a very broad-based recovery," said Lawrence Yun, the chief economist for the Realtors Association.

The median sales price was $170,700 US, up almost four per cent from $164,600 a month earlier and nearly unchanged from $170,000 in March 2009.

The inventory of unsold homes on the market was up 1.5 per cent at 3.6 million. That's an eight-month supply at the current sales pace.

Recent upturn

Sales nationally had declined over the winter, eroding gains made last fall and summer. The downward direction troubled economists because the government has taken unprecedented steps to support the housing sector.

For several months, home shoppers didn't feel rushed after lawmakers extended the deadline to qualify for tax incentives. The government is offering an $8,000 credit for first-time buyers and $6,500 for current homeowners willing to buy and move into another property.