New home sales in the U.S. jumped by much more than expected in the month of March, according to a report released by the Commerce Department on Tuesday.
The report said new home sales soared by 4.0 percent to an annual rate of 694,000 in March after surging up by 3.6 percent to a revised rate of 667,000 in February. Economists had expected new home sales to climb by 1.9 percent.
With the bigger than expected increase, new home sales rose to their highest annual rate since hitting 711,000 last November. New home sales were up by 8.8 percent year-over-year.
The jump in new home sales was partly due to a spike in sales in the West, which shot up by 28.3 percent to a rate of 222,000.
New home sales in the South also rose by 0.8 percent to a rate of 371,000, while new home sales in the Midwest fell by 2.4 percent to a rate of 82,000 and new home sales in Northeast plunged by 54.8 percent to a rate of 19,000.
The Commerce Department said the median sales price of new houses sold in March was $337,200, up 3.5 percent from $325,800 in February and up 4.8 percent from $321,700 in the same month a year ago.
The estimate of new houses for sale at the end of March was 301,000, representing 5.2 months of supply at the current sales rate.
On Monday, the National Association of Realtors released a separate report showing existing home sales increased by much more than expected in the month of March.
NAR said existing home sales climbed by 1.1 percent to an annual rate of 5.60 million in March after surging up by 3.0 percent to a rate of 5.54 million in February. Economists had expected existing home sales to edge up by 0.2 percent.
Existing home sales rose for the second consecutive month but are still down by 1.2 percent compared to the same month a year ago.