WASHINGTON, April 24: Sales of new US homes plunged to their lowest level in over 16 years in March despite hefty home price declines in response to a glut of unsold homes, Commerce Department data showed on Thursday.

The grim monthly snapshot on sales of newly built homes came two days after a key industry survey said sales of existing homes had slid further in March, underscoring the worst housing sector slump in decades.

Most analysts say the market has not yet reached bottom after the collapse of a boom market two years ago that has weakened the economy and cost banks billions of dollars in losses.

The Commerce Department reported March new home sales fell 8.5 per cent to a seasonally adjusted annual pace of 526,000 units, well below analysts’ consensus forecast for a rate of 580,000.

The March sales pace was the weakest since October 1991 and 36.6 per cent below the March 2007 estimate of 830,000.

The median sales price of new houses sold in March was down 13.3 per cent year-over-year at $227,600.

That represents the largest 12-month decline since 1970, and leaves median home prices at their lowest point since September 2006.

The average sales price of a new home was $292,200, down 11.3 per cent over the last year, a new record 12-month decline.

Builders cut 1.1 per cent off the actual number of unsold homes to 468,000, but with the slowing sales rate they were left with an 11-month supply, the largest inventory overhang since an 11.3-month supply in September 1981.

“Excess supply remains significant, suggesting that the downward adjustment will continue in the months ahead,” said Marie-Pierre Ripert, analyst at Natixis.

Ripert added that median prices are “likely to remain on their downward trend.”

The Commerce Department also revised January and February sales down by a net 9,000 units.

It initially reported a 590,000 annual rate of sales in February, but reduced that to 575,000.

Plummeting new home sales in March affected homes all regions of the country. The Northeast was hardest hit, with sales plummeting 19.4 per cent to their lowest level since 1981. Sales in the Northeast have fallen a record 64.6 per cent over the last 12 months.—AFP