US new-home sales plunge in March

Sales of new US homes plunged in March after a sharp rise in February, the Commerce Department reported Thursday.

Sales of new single-family houses came in at an annual rate of 481,000 last month, down 11.4 percent month-over-month.

February's sales were revised upward to a rate of 543,000 from the previous estimate of 539,000.

House prices fell and inventory on the market grew in March.

The median sales price of new houses sold in March was $277,400, down from $281,600 in February and the lowest since September.

The number of new houses for sale rose 1.9 percent to 213,000. That represented a supply of 5.3 months at the current sales rate, the department said.

The March sales pace was well below analysts' average estimate of 520,00.

The decline is a correction after three months of big gains, said Ian Shepherdson of Pantheon Macroeconomics.

"The trend clearly is now upwards, consistent with the rising trend in mortgage applications and the strength of homebuilders' sentiment, so we are very hopeful of sustained gains in sales across the remainder of the year, starting with a robust spring season," he said.