Sales of new single-family homes were up 4.9 percent in April to a seasonally adjusted annual rate of 1.198 million units, following a substantial downward revision to sales for the first quarter of the year, the U.S. Commerce Department reported. Year-to-date, new-home sales for the first 4 months of the year were down 11.2 percent from the same period last year.
"The rebound in sales in April, as reported by the government, was somewhat surprising but not that unrealistic considering the downward revisions that accompanied it," said National Association of Home Builders (NAHB) President David Pressly. "Indeed, builders are seeing a tapering off of demand and NAHB's Housing Market Index survey of builders fell to a level of 45 in May, the lowest reading since mid-1995."
"The reported rebound in new-home sales for April certainly is welcome news, although the substantial downward revisions for the first quarter of the year left the sales pace well below 2005 on a year-to-date basis," said NAHB Chief Economist David Seiders. "We continue to believe that the housing market is cooling down in an orderly fashion from the record pace last year, largely because of a pullback by investors/speculators. NAHB's current forecast shows about a 13 percent decline in new-home sales for 2006 as a whole."
Three of four regions across the country posted increased sales of new homes in April. Sales were up in the Northeast by 8.2 percent, in the South by 7.8 percent and in the West by 2.0 percent. Sales in the Midwest were down by 1.1 percent. All regions were down substantially on a year-to-date basis.
The inventory of new homes for sale rose to 565,000 units at the end of April, a 5.8 months' supply at the current sales pace. All of the increase was for-sale units that were not yet started, which represented 20 percent of the inventory level.
Units still under construction were almost 57 percent of the inventory, and completed homes for sale were 23 percent of the total--about the same as a year earlier. The median length of time that completed homes for sale were on the market was 4 months in April, compared with 4.4 months a year earlier.
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