New-Home Sales Fall More Than Expected
A larger-than-forecast decline in new-home purchases in April from the strongest pace in almost a decade indicates a pause in demand in the midst of the busy spring selling season, government data showed May 23.
Highlights of New Home Sales
• Single-family home sales decreased 11.4% to a 569,000 annualized pace (median forecast called for a 610,000 rate).
• The median sales price of a new house dropped 3.8% from April 2016 to $309,200.
• Supply of homes rose to 5.7 months, the highest since September 2015, from 4.9 months; there were 268,000 new houses on the market at the end of April, the most since July 2009.
Key Takeaways
While new-home sales only account for about 10% of the residential market, the broader housing picture has remained bright with solid job growth and modest boosts to wages. A post-election surge in mortgage rates has subsided, allowing would-be buyers a little more breathing room while an increase in inventory gives them more options. The real pace of demand is probably in between the March and April rates.
Other Details
• New-home sales report includes annual revision of data going back to January 2015.
• Drop in demand was led by a 26.3% slump in the West, the most since October 2010, after an 11.8% jump in March; sales fell in other three regions as well.
• March reading for the United States was revised to a 642,000 pace, the strongest since October 2007, from a previously estimated 621,000.
• Commerce Department said there was 90% confidence that the change in sales last month ranged from a 0.9% drop to a 21.9% decrease, underscoring the volatility of the data.
• New-home sales are tabulated when contracts are signed; existing-home sales are based on contract closings, for which April data are due for release May 24 from the National Association of Realtors.
• Data released jointly by the Census Bureau and Department of Housing and Urban Development in Washington.
