April New Home Sales Falter, But Outlook Good

Sales of new single-family houses in April fell by 1.5 percent from March but improved by nearly 12 percent from a year ago, HUD and the Census Bureau reported yesterday.

The report said April new home sales came in at a seasonally adjusted annual rate of 662,000, 1.5 percent below the revised March rate of 672,000, but was 11.6 percent higher than a year ago (593,000).

Regionally, a sharp decline in the West offset gains in the South and Northeast. Sales in the West fell by nearly 8 percent to 176,000 units, seasonally adjusted, from 191,000 units in March, but improved by nearly 19 percent from a year ago. In the South, sales edged up by 0.3 percent to 355,000 units in April from 354,000 units in March and improved by 6 percent from a year ago. In the Northeast, sales jumped by 11.1 percent to 40,000 units in April from 36,000 units in March and improved by 5.3 percent from a year ago. Sales in the Midwest were unchanged at 91,000 units in April but improved by 26.4 percent from a year ago.

The median sales price of new houses sold in April was $312,400. The average sales price was $407,300. The seasonally adjusted estimate of new houses for sale at the end of April fell slightly to 300,000 from 301,000 in March, representing a supply of 5.4 months at the current sales rate.

Despite the monthly decline and revised downward revisions, said Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., new home sales are up 8.4 percent year-to-date.

“Sales of homes not started were the strongest in five months, which bodes well for housing starts in coming months,” Vitner said. “Stronger job and income growth appear to be driving demand for new homes and sales are off to a solid start this year. Rising mortgage rates and rising home prices will likely put a relatively low ceiling on sales gains this year.”