April New Home Sales Drop Sharply

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The U.S. Census Bureau and the Department of Housing and Urban Development reported Thursday morning that sales of new homes in April decreased to a seasonally adjusted annual rate of 673,000, a drop of 6.9% from the revised March rate of 723,000 but an increase of 7.0% compared with the April 2018 rate of 629,000. The consensus estimate from a survey of economists expected a rate of around 680,000. The March 2019 rate was revised upward by 31,000.

The sharp decline was due at least partially to the large upward revision in March sales. Inventory is up 11% year over year but slightly lower month over month (down 0.9%).

At its peak in 2005, new home sales posted a seasonally adjusted annual rate of nearly 1.4 million.

The Census Bureau also reported that the median sales price for new homes sold in April jumped by $40,000 to $342,200, and the average sales price rose month over month by $17,700 to $393,700. At the end of April, the number of new homes for sale on a seasonally adjusted basis totaled 332,000, down by 12,000 month over month, and represented a supply of 5.9 months at the current sales rate.

In April, 38% of the estimated 56,000 monthly total were sales for homes priced at less than $300,000. The percentage is down 12 percentage points from March.

Sales of homes priced between $300,000 and $399,999 rose month over month from 21% to 25% of all sales. Sales of homes in the range of $400,000 to $499,999 rose by four points to 16% of the total, and sales rose by three points to 15% for homes sold in a price range of $500,000 to $749,999. Home sales for properties priced above $750,000 accounted for 5% of all new home sales in April, unchanged compared with March.

On a seasonally adjusted basis, year-over-year new home sales are up 6.9% nationally. In the South, year-over-year new home sales for the first four months of 2019 up 5.1%; in the Northeast sales are down more than 12%; in the Midwest, sales are up 3.6%; and in the West, sales jumped by 16.8%.

On a non-seasonally adjusted basis, homes sold in the South fell by 5,000 to 35,000 between March and April. Home sales were up by 1,000 to 3,000 in the Northeast, while sales in the Midwest were flat at 9,000. Sales in the West fell by 3,000 to a total of 18,000.

The for-sale inventory at the end of the month was unchanged in the Northeast at 28,000 and down by 1,000 in the South to 178,000. In the Midwest, new homes for sale totaled 38,000, unchanged month over month, while supply in the West dropped by 4,000 to 82,000.

It’s worth noting that the monthly totals are subject to multiple revisions and those revisions are often significant.

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