New home sales in the United States fell in March to the lowest level in 16 and a half years while prices declined by the largest amount in nearly four decades, according to a report released Thursday by the Commerce Department.

U.S. new home sales dropped by 8.5 percent last month to a seasonally adjusted annual rate of 526,000 units, the lowest level since October 1991.

Sales in March were 36.6 percent below the year-earlier level and marked the fifth straight monthly decline in sales of new homes.

Regionally, new home sales dropped by 19.4 percent in the Northeast. Sales in the Midwest also declined 12.5 percent. In the South and the West, sales were down 4.6 percent and 12.9 percent respectively.

The median price of a new home, a typical market price where half of new homes are sold for more and half for less, decreased last month to 227,600 dollars, down 13.3 percent from the level of a year ago. That was the biggest year-over-year price decline since a 14.6 percent plunge in July 1970.

Inventories of unsold new homes at the end of March totaled 468,000 units. That represented a supply of 11 months at the current sales rate, up from 10.2 months for February.

On Tuesday, a report by the National Association Realtors showed that U.S. existing home sales fell 2 percent last month to a seasonally adjusted annual rate of 4.93 million units, or 19.3 percent below the March 2007 level.

The housing slump is expected to be prolonged as the U.S. economy has slowed down significantly amid a severe credit crisis stemming from troubles in the subprime mortgage market, where loans are given to homebuyers with weak credit histories.

(Xinhua News Agency April 25, 2008)