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US new-home sales drop 7% in March
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WASHINGTON (AP) - Sales of new homes fell in March by the largest amount in more than a year, indicating that the U.S. housing market remains under strain despite some modest signs of improvement.

The Commerce Department said Tuesday that sales dropped 7.1 percent in March to a seasonally adjusted annual rate of 328,000 units. That followed a 7.3 percent increase in sales in February. This figure was revised up from an initial estimate that February sales had fallen 1.6 percent.

The weakness in March could reflect that a warmer-than-normal winter caused sales that normally occur at the start of the spring sales season in March to occur in February instead.

The median sales price was $234,500 in March, down 1 percent from the February price.

Sales of new homes stand at just about half the roughly 700,000-a-year pace that analysts consider evidence of a healthy market.

Last week, the National Association of Realtors reported that sales of previously owned homes fell 2.6 percent in March to a seasonally adjusted annual rate of 4.48 million units. For previously owned homes, economists consider a healthy annual sales rate to be roughly 6 million.

The sales declines in March were led by a 27 percent drop in the West. Sales in the Midwest fell 20 percent. New-home sales rose 7.7 percent in the Northeast and 3.1 percent in the South.

A separate report on home prices showed that home prices dropped in February in most major U.S. cities for a sixth straight month. The Standard & Poor's/Case-Shiller home-price index shows that prices dropped in February from January in 16 of the 20 cities it tracks.

Though new homes represent less than 10 percent of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to statistics compiled by the Realtors.

A key reason for weak sales in the new-home market is that builders must compete with foreclosures and short sales. (Short sales occur when lenders allow homes to be sold for less than what's owed on the mortgage.)

About half of the states reported sharp increases in foreclosure activity in February. The pace of foreclosures is rising now that states have reached settlements with the nation's five biggest mortgage lenders over foreclosure abuses.

Builders have stopped working on many projects because it's been hard to get financing and to compete with cheaper resale homes.

Raging wildfires in South force evacuations in Tennessee
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Fires blaze on the hills above Dollywood’s DreamMore Resort in Pigeon Forge, Tenn. Tuesday morning. Bruce McCamish Photography | The Covington News

ATLANTA (AP) — Raging wildfires fueled by high winds forced the evacuation of thousands of people and damaged hundreds of buildings in a popular resort town on the border of the Smoky Mountains National Park as National Guard troops arrived early Tuesday to help overwhelmed firefighters.

Rain had begun to fall in some areas, but experts predicted it would not be enough to end the relentless drought that has spread across several Southern states and provided fuel for fires now burning for weeks in states including Tennessee, Georgia and North Carolina.

The storms appeared to be taking aim at the nearly 28,000-acre Rough Ridge Fire in north Georgia and the nearly 25,000-acre Rock Mountain Fire that began in Georgia and then spread deep into North Carolina.

In Gatlinburg, Tennessee, officials said hundreds of homes and other buildings, including a 16-story hotel, were damaged or destroyed by flames. And preliminary surveys indicated that Westgate Resorts, with more than 100 buildings, and Ober Gatlinburg were both likely destroyed, according to a news release Tuesday morning.

Emergency officials ordered evacuations in downtown Gatlinburg and Pigeon Forge and in other areas of Sevier County near the Smoky Mountains while crews continue to battle the blaze, which also had crept to the edge of the Dollywood theme park. About 14,000 residents and visitors were evacuated from Gatlinburg alone, officials said.

No deaths have been reported, though several people were hospitalized with burns, emergency officials said in the news release.

Officials say there are about 1,200 people sheltering at the Gatlinburg Community Center and the Rocky Top Sports Park. Several other shelters have opened to house those forced from their homes. TV broadcasts showed residents streaming out of town just as rain started to wet roads.

Workers at an aquarium evacuated because of the wildfires were concerned about the thousands of animals housed there. Ryan DeSears, general manager of Ripley's Aquarium of the Smokies, told WBIR-TV the building was still standing and all workers had been evacuated late Monday. However, he said workers were anxious to return to check on the well-being of the 10,518 animals.

The rain forecast "puts the bull's-eye of the greatest amounts right at the bull's-eye of where we've been having our greatest activity," said Dave Martin, deputy director of operations for fire and aviation management with the southern region of the U.S. Forest Service.

The projected rainfall amounts "really lines up with where we need it," Martin said Monday. "We're all knocking on wood."

After weeks of punishing drought, any rain that falls should be soaked up quickly, forecasters said. It will provide some relief but won't end the drought — or the fire threat, they said.

Drought conditions will likely persist, authorities said. The problem is that rainfall amounts have been 10 to 15 inches below normal during the past three months in many parts of the South, authorities said.

"I think we racked up deficits that are going to be too much to overcome with just one storm system," said Mark Svoboda, director of the National Drought Mitigation Center in Lincoln, Nebraska.

"I would say it's way too early to say 'Yes, this drought is over,'" Svoboda said. "Does it put a dent in it? Yes, but we have a long ways to go."

The rain also brings danger because strong winds at the leading edge of the storms can topple trees and limbs that can kill and injure firefighters, he said.

In Mississippi, trees were reported downed Monday in nearly 20 counties across the state. Sustained winds of 30 to 40 mph with gusts of more than 50 mph were reported and more than 2 inches of rain fell in some areas.

Power outages peaked at more than 23,000 statewide in Mississippi. Powerlines downed by winds sparked grass fires in four counties, said Greg Flynn, a spokesman for the Mississippi Emergency Management Agency.

The storms moved across Alabama on Monday night and fell on Georgia during the overnight hours. High wind warnings were issued for mountainous areas in northern parts of Georgia.

In South Carolina, the stormy forecast was giving hope to firefighters battling a blaze in the northwest corner of the state. The South Carolina Forestry Commission hopes to contain the Pinnacle Mountain fire by the middle of next week.
More rain was expected Tuesday night and Wednesday morning in parts of Louisiana, Mississippi and Alabama.
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Fuller reported from New Orleans. Associated Press writers Rebecca Yonker in Louisville, Kentucky; Jeff Amy in Jackson, Mississippi; Beth Campbell in Louisville, Kentucky; and Jack Jones in Columbia, South Carolina, contributed to this report.