The United States Commerce Department released figures today that show a softening in the new housing market. This following Tuesday’s report that existing home sales showed a slight decline for the month of March. The Commerce Department stated that sales dropped 14.5 percent to a new home sales stallseasonally adjusted rate of 384,000 which is the second straight month of decline.

At the same time, prices for new homes actually increased by 12.6 percent to $290,000 compared to the same period one year ago. When builders can command higher prices during declining unit volume it indicates that builders are charging more to make up for the lack of sales, the cost to construct including materials and labor have gone up or any combination of either.

New and existing housing sales are a key driver in the economy and a strong spring is hoped for to pull the economy out of its tepid performance. When a contract for a new home is signed, workers are needed to build the home, materials are required and property taxes and permit fees collected. This also means that other industries benefit when a home sells such as furniture, appliances and outdoor equipment.

The decline is perhaps due to the severe winter much of the country endured and March was no exception but the data suggests that we could be in for a rather long summer if the March numbers don’t prove to be an anomaly. April new home sales will be reported in late May. If the economy begins to turn south and the stock market loses momentum and erases much of its gains, it could give the Fed more pause when deciding when and if to halt the quantitative easing program later this fall. It’s not very likely that will happen but if we do see a slowdown it’s certainly more than a possibility.

That will mean rates for real estate investors and home buyers of all stripes should continue to enjoy lower mortgage rates well into the fourth quarter of this year.