- The Washington Times - Friday, April 25, 2008

ASSOCIATED PRESS

Sales of new homes plunged in March to the lowest level in 16½ years as housing slumped further at the start of the spring sales season.

The median price of a new home in March, compared with a year ago, fell by the largest amount in nearly four decades.

The Commerce Department reported yesterday that sales of new homes dropped by 8.5 percent last month to a seasonally adjusted annual rate of 526,000 units, the slowest sales pace since October 1991.

The median price of a home sold in March dropped 13.3 percent compared with March 2007, the biggest year-over-year price decline since a 14.6 percent plunge in July 1970.

The dismal news on new home sales followed reports showing sales of existing homes fell by 2 percent in March. The housing market, which boomed for five years, has been in a prolonged slump for the past two years with sales and home prices falling at especially sharp rates in formerly boom areas of the country.

For March, sales were down in all regions of the country, dropping the most in the Northeast, a decline of 19.4 percent. Sales fell by 12.9 percent in the West, 12.5 percent in the Midwest and 4.6 percent in the South.

In other economic news, orders to factories for big-ticket manufactured goods fell for a third straight month in March, the longest string of declines since the 2001 recession.

The Commerce Department said demand for durable goods dropped by 0.3 percent last month, a worse-than-expected performance that underscored the problems manufacturers are facing from a severe economic slowdown. The last time orders fell for three consecutive months was from February to April 2001, when the country was sliding into the last recession.

The weakness in manufacturing orders was led by a 4.6 percent drop in orders for autos, a sector hard hit by soaring gas prices and the weakening economy, which have cut sharply into car sales. Orders in the category that includes home appliances fell by 6.6 percent. That industry has been hurt by the two-year slump in home sales.

The Labor Department reported that claims for unemployment benefits fell by 33,000 last week to 342,000. Economists had been expecting claims to rise by 3,000.

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