Demand for U.S. durable goods rose during March in a broad-based increase that was better than expected, and a gauge of spending by businesses rebounded.

Meanwhile, U.S. new-home sales rose in March but the increase was smaller than expected, while inventories inched up and prices kept rising.

Orders for durable goods increased by 3.4% last month to a seasonally adjusted US$214.85 billion, the U.S. Commerce Department said today.

Durables rose 2.4% in February, revised from a previously estimated 1.7% increase.

A key barometer of business equipment spending — orders for nondefense capital goods excluding aircraft — climbed by 4.7%, after decreasing 2.3% in February.

The 3.4% increase in overall durable goods orders exceeded expectations on Wall Street. The median estimate economists had durables 2.7% higher in March.

Commerce reported rising transportation orders in March pushed up overall demand in durable goods. Transportation orders rose 8.0%, after jumping 10.2% in February. Orders for commercial planes surged 37.6%, while military aircraft orders fell 48.8%. Motor vehicles and parts increased by 3.3% last month.

Orders for all durables except transportation goods increased 1.5%, after dropping 0.4% in February.

Separately, the U.S. Commerce Department said sales of single-family homes increased by 2.6% to a seasonally adjusted annual rate of 858,000,

The average price of a home last month increased to US$330,900, up from US$326,000 in February and US$298,800 in March 2006. The median price was US$254,000, higher than US$251,800 in February and US$238,800 in March 2006.

February new-home sales decreased 4.2% to an annual rate to 836,000, a figure revised down from an earlier estimated 848,000. The median estimate of economists was a 5.0% increase in March sales to a 890,000 annual rate.

Year over year, new-home sales were 23.5% lower than the level in March 2006.