Sales of new homes surged by 8.9 percent in March, the biggest increase since June 2003, the Commerce Department reported. The increase pushed sales of new, single family houses to a record seasonally adjusted annual rate of 1.228 million in March. That was up from 1.128 in February.

The monthly increase of 8.9 percent was the highest since June 2003.

By region, new home sales soared by 19.3 percent in the South, hitting a record rate of 613,000. But in the Northeast, sales plummeted by 24.3 percent to a rate of 78,000. The West posted an increase of 5.1 percent to a pace of 349,000, and in the Midwest, sales rose by 5 percent to a pace of 188,000.