Sales of newly built, single-family homes fell 6.7 percent to a seasonally adjusted annual rate of 673,000 units in April after a sharp upwardly revised March report, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The March sales pace of 723,000 units was the highest monthly rate since the Great Recession, and the April figure was the third-highest pace.
"After a challenging final quarter of 2018, data for the start of the year shows stabilization and modest growth for home sales,” said Greg Ugalde, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Torrington, Conn. “Our builder surveys show that traffic is steadily increasing. The challenge facing builders is how to deal with ongoing supply-side constraints such as a lack of buildable lots and labor that are putting upward pressure on housing costs.”
“The strong March sales pace was due to a combination of lower interest rates and the use of builder price incentives,” said NAHB Chief Economist Robert Dietz. “At the same time, the April sales report was a solid number coming off a very strong March reading.”
A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the April reading of 673,000 units is the number of homes that would sell if this pace continued for the next 12 months.
The inventory of new homes for sale was 332,000 in April, representing a 5.9 months’ supply. The median sales price was $342,200. The median price of a new home sale a year earlier was $314,400.
Regionally, and on a year to date basis, new home sales rose 1.3 percent in the Midwest, 6.7 percent in the West and 10.3 percent in the South. Sales fell 17.6 percent in the Northeast.