Phoenix leads the U.S. real estate market to begin a moderate recovery

Phoenix City leads the U.S. real estate market to begin a moderate recovery (Alberta Times) New home sales in the United States fell in March from the previous month, but performed better than market expectations. 20 major...

(Alberta Times)

New home sales in the United States fell in March from the previous month, but performed better than market expectations. The decline in residential prices in 20 major cities also narrowed in February. The two data show that the long-term sluggish real estate market is showing some signs of stability, but it is still faltering on the road to recovery. The Ministry of Commerce announced on the 24th that new home sales in March fell 7.1% from the previous month, to an annual rate of 328,000 units, which was better than the 319,000 units expected by analysts surveyed by Bloomberg. Compared with the same month last year, new home sales increased 7.5% in March. New home sales in February were revised upward to 353,000 units from the initially announced 313,000 units, a 7.3% increase from January, the best performance since November 2009. The report also showed that the median price of new homes in March climbed 6.3% from the same period last year to $234,500. As of the end of March, the inventory of new homes on the market was 144,000 units, an all-time low. At the current sales rate of the housing market, it will take approximately 5.3 months to digest this inventory. From a regional perspective, new home sales in the West shrank by 27% in March from the previous month, and the Midwest also fell by 20%. However, new home sales in the Northeast and South increased by 7.7% and 3.1% respectively. The February S&P/Case-Shiller house price index released on the same day showed that house prices in 20 major U.S. cities fell 3.5% year-on-year, but the decline was the smallest since February last year; economists surveyed by Bloomberg predicted a 3.4% fall on average. After adjusting for inflation, house prices rose 0.2% in February from the previous month, the first increase since April last year. Stable house prices will lay the foundation for a sustained recovery in the housing market, as the confidence of potential buyers will be supported. Borrowing costs approaching an all-time low and an improving job market may help the housing market absorb foreclosures pending clearance so that the housing market no longer hinders economic growth. "Factories such as affordability of housing prices, an improving labor market boosting consumer confidence, expansion of mortgage credit, and pent-up demand will all stimulate home sales," said Forcher, a senior economist at PNC Financial Services. The report shows that 15 of the 20 largest cities in the United States saw housing prices fall in February compared with the same period last year, led by Atlanta's 17% decline; Phoenix's housing prices climbed 3.3%, the largest increase.