New orders for U.S.-made durable goods and sales of new U.S. homes rose more than expected in March, reports showed Wednesday, raising anticipation that the Federal Reserve (Fed) will continue to boost interest rates. Durable-goods orders jumped 6.1 percent, the largest increase since May 2005, the Commerce Department reported. Transportation orders rose 14 percent in March, with motor vehicles and parts orders up 2.8 percent. Excluding transportation orders, durable goods—expensive manufactured items expected to last at least three years—rose 2.8 percent. All categories of orders rose, except for electrical equipment and defense aircraft. Computers and electronics orders rose 7.5 percent, machinery orders rose 7.5 percent, and manufacturing orders rose 7.9 percent. A separate Commerce Department report said sales of new U.S. homes rose a much larger-than-expected 13.8 percent in March to a 1.213 million unit annual rate, the biggest monthly gain since April 1993, although home prices fell sharply. Despite the strong March new-homes sales pace, there were additional signs that the U.S. housing boom is losing momentum. The median home price fell 2.2 percent from a year earlier, the first yearly decline since December 2003. Also, the March sales pace was 7.2 percent below the pace from March 2005. A separate report showed U.S. mortgage applications fell for a third consecutive week, with demand for home purchase loans falling to its lowest level since November 2003, an industry trade group said.
