Sales of new homes in the United States fell unexpectedly in March, but the decline was limited to the Midwest, suggesting the housing market recovery remains intact and in contrast to a broadly weak economy.
The U.S. Department of Commerce reports new home sales fell 1.5 percent last month, the third consecutive month they have declined. New home sales fell to a seasonally-adjusted 511,000 units, short of the 520,000 predicted by economists.
The report comes on the heels of last week's National Association of Realtors report that existing home sales in March rebounded by a greater-than-expected 5.1 percent, with increases seen in all four major regions of the United States.
Despite lagging sales of new homes, analysts remain optimistic about the housing market. Monthly sales figures can be volatile, but economists say new home sales are trending higher over longer periods.
The U.S. financial markets did not appear to react to the new home sales data, as investors remain on the sidelines in anticipation of the Federal Reserve Board's (Fed) policy meeting on Tuesday and Wednesday.
Concerned about the strength of the overall U.S. economy, the Fed is expected to leave interest rates unchanged after raising them from record lows in December, its first interest rate hike in nearly a decade.