Spring Surge in New-Home Sales
New-home sales climbed 6.8 percent in April reaching a seasonally adjusted annual rate of 517,000, as home prices also saw a big jump too, the Commerce Department reported Tuesday. “Sales are moving forward and our builder members are telling us they are starting to see more activity as more buyers get off the fence and enter the marketplace,” says Tom Woods, chairman of the National Association of Home Builders.
Inventories of new homes for sale also saw a slight increase in April to 205,000 units. This now represents a 4.8-month supply at the current sales pace – still, most economists consider a 6 month supply healthy for the sector. With tight supplies, the median price for a new home soared 8.3 percent in April compared to a year ago, now at $297,300. “While higher home prices could reduce affordability, they boost household equity, which could boost consumer spending,” Reuters reports.
Across the country, new-home sales rose by the highest percentage in the Midwest, increasing nearly 37 percent in April month-over-month and reaching a seven-month high. New-home sales also rose nearly 6 percent in the South. However, new-home sales were down in the Northeast, falling 5.6 percent month-over-month, and falling by 2.3 percent in the West.