The Housing Slump Continues

By Mark J. Donovan

The U.S. housing market is still in trouble. Though new home sales increased in March, the increase was half of what industry analysts were expecting.

The Commerce Department reported yesterday that new single family home sales rose to a seasonally adjusted annual rate of 858,000 units in March. This figure is 2.6 percent higher than February which was the slowest month in the past 7 years, and left the sales pace 23.5% lower than a year ago.

This report follows a day after a report came out that existing home sales fell 8.4% in March, the biggest drop seen in 18 years.

If you are a seller the only positive nugget out of this news is that home prices rose in March 6.4% to a medium price of $254,000. The northeast region of the country slanted this data due to the fact that home sales in this are were the strongest and they usually command higher prices.

Analysts believe the major contributor to the housing slump is the increase in mortgage foreclosures.