New home sales in the United States last month plunged to their lowest level in over 16 years, according to new data released by the U.S. Commerce Department on Thursday. The median price of a new home in March also dropped from last year by the largest amount in nearly four decades. The Commerce Department report said sales of new homes dropped by 8.5 percent last month to a seasonally adjusted annual rate of 526,000 units, the slowest sales pace since October 1991. The median price of a home sold in March dropped by 13.3 percent compared with March 2007, the biggest year-over-year price decline since a 14.6 percent plunge in July 1970. The poor figures came after a report showing sales of existing homes fell by 2 percent in March. Sales of new homes are usually expected to do better than those of existing homes. For March, sales of new homes were down in all regions of the country. They fell furthest in the Northeast, where they were down 19.4 percent. Sales fell by 12.9 percent in the West, 12.5 percent in the Midwest and 4.6 percent in the South. The figures reflect an ongoing crisis in the housing market, which shows little sign of easing at present. Despite government action to help homeowners, an increasing number of people are defaulting on mortgages, dumping their foreclosed homes onto an already-glutted market. Tighter lending regulations in the wake of past lax mortgage oversight have made it even harder for the market to move houses.
