Sales of new single-family houses fell 6.9% in April, but March’s total was revised up to a post-recession high, painting a generally favorable outlook for the market.
New homes were sold at a seasonally adjusted annual rate of 673,000 last month, down from a 12-year high of 723,000 in March. The April figure was till 7% above the total a year ago, the Commerce Department said Thursday. Economists surveyed by Bloomberg expected a 675,000 annual sales pace.
The median sales price of new houses was $342,200, up 5% from March and 8.8% from a year ago.
A big drop in mortgage rates didn’t boost new home sales. The average rate for a 30-year, fixed-rate mortgage fell to 4.14% in April from 4.27% in March, according to Freddie Mac. The average rate in 2018 was 4.54%.
Existing home sales also have been sluggish, dipping 0.4% last month.
Broadly, low housing supplies and high prices have constrained sales. Builders face shortages of workers and lots that have pushed up their costs.
But new home sales, which represent about 10% of the housing market, turned in a strong first quarter before April’s pullback and analysts are looking for a solid performance the rest of the year.
“The underlying trend in sales remains strong,” says Zillow economic analyst Matthew Speakman. “Builders are finding ways to deliver homes despite expensive land and labor prices, a boon to buyers thirsty for more supply.”
Housing starts: regained momentum, rising 5.7% in April
Existing-home sales: fall again despite lower mortgage rates
U.S. home construction picked up momentum in April. Housing starts rose 5.7% last month to a seasonally-adjusted rate of 1.2 million.
“We could see further improvement in new construction over the next year as home building still remains behind population and job growth in most areas.” Said Danielle Hale, chief economist for realtor.com. “Strength in orders has already boosted builder confidence, as well as new construction.”