Purchases of new homes in the U.S. unexpectedly declined in March for a third month, reflecting the weakest pace of demand in the West since July 2014.
Total sales decreased 1.5 percent to a 511,000 annualized pace, a Commerce Department report showed Monday. The median forecast in a Bloomberg survey was for a gain to 520,000. In western states, demand slumped 23.6 percent.
Purchases rose in two regions last month, indicating uneven demand at the start of the busiest time of the year for builders and real-estate agents. While new construction has been showing limited upside, cheap borrowing costs and solid hiring will help ensure residential real estate continues to expand.
“The overall picture is still pretty good,” said Tom Simons, a money-market economist at Jefferies LLC in New York. The monthly swings in the new-house segment, a very small share of the market, “make it very hard” to get a definitive read from the headline numbers, he said. “As the labor market improves, people will be more willing to take risks and invest in housing.”