All elements are kicking in for housing right now with prices showing strength, permits moving up, and also sales on the climb. New home sales came in much stronger than expected, at a 621,000 annualized rate in March which was last exceeded by a 622,000 rate in July last year but is otherwise, by far, the best of the expansion.

The surge in sales did not come at the expense of pricing which, on the contrary, was very strong in March, up a monthly 7.5 percent to a median $315,100. The year-on-year rate, at only 1.2 percent vs 15.6 percent for sales, offers room for further price gains ahead. Supply did move into the market, up 3,000 to 268,000 units, though relative to sales remains thin at 5.2 months vs 5.4 months in February and January and 5.5 months in March last year.

The West is the standout region, up 16.7 percent in the month to a 175,000 rate and a 33 percent year-on-year gain. The South is by far the largest region for new homes, up 1.6 percent in the month to 323,000 and a 5.9 percent year-on-year gain. Also having a good month was the Northeast, up 26 percent in the month to 39,000.