Sales of new U.S. single-family homes rose in March, the government reported Tuesday, indicating the housing-market recovery remains on track. The Commerce Department said sales rose 1.5 percent last month to an annual rate of 417,000 units. The gain followed a 7.6 percent drop in new-home sales in February. Analysts had expected a slightly bigger increase in March. Compared to a year ago, new-home sales were up 18.5 percent, reflecting the strength in the housing market that has helped the broader economy. However, sales are being limited by a lack of supply of homes on the market in some parts of the country. While the inventory of new homes on the market rose 2 percent to 153,000 units last month, it was not far above record lows. At March's sales pace, it would take 4.4 months to exhaust the supply on the market, the same pace as the previous month. A supply of six months is normally considered a healthy balance between supply and demand. The low supply should push up new-home prices. Median prices of new homes are up 3 percent from a year ago.
