Sales of newly built, single-family homes rose 3.3% in April to a seasonally adjusted annual rate of 526,000 units, the U.S. Commerce Department reported. However, the gain reflected downward revisions to sales numbers reported for each of the previous three months, including a particularly large revision for March.
“The modest bounce-back in new-home sales recorded for April followed a sharp decline in March and belies the fundamental weakness that continues to exist in the nation’s housing market,” said NAHB Chief Economist David Seiders. “Indeed, sales were down 42% on a year-over-year basis, the largest such reversal since September 1981. Our latest builder surveys actually show that home buying has not yet stabilized, and we are anticipating some further erosion over the coming months. Certainly, the need remains for Congress to approve targeted policy stimulus, in the form of a temporary tax credit for home buyers and other measures, and to do this as quickly as possible.”
April's preliminary sales pace of 526,000 units was equivalent to the previously reported sales pace for March. However, Commerce this month revised March's reading substantially downward to 509,000 units – 11% below the revised February reading.
Sales rose in three out of four regions in April. The Northeast posted a 41.7% gain that erased an equivalent decline in the previous month, while the Midwest and West recorded gains of 5.8% and 8.3%, respectively. The South, which is the nation’s largest housing market, posted a 2.4% decline.
The inventory of new homes for sale declined 2.4% in April to 456,000 units, which is a 10.6-month supply at the current sales pace. Completed homes accounted for 40% of total new homes for sale, up from 33% a year earlier, and the median number of months for sale since completion rose to 8.0 - the highest since mid-1991.