Based on estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development, new home sales rose 3.3% in April from a downwardly revised annualized rate of 509.000 units in March to an annualized rate of 526.000 units.
The median sales prices rose 1.5% to $246,100 in April while the average sales price was $321,000 up 3.0% versus last year.
The supply of new homes for sale decreased slightly to 10.6 months from 11.1 months. The seasonally adjusted estimate of new houses for sale at the end of April was 456,000 down 20.4% from the peak in mid ’06.
Today’s somewhat optimistic report on new home sales, given how depressed expectations have been and continue to be in relation to the sector, shows that a correction and a sense of normalcy in home building perhaps is starting to take place. Additionally, the inventory of unsold new homes continues to drop. Total inventories have dropped for eight straight months.
Meanwhile, the number of unsold completed new homes – a key factor behind future
construction and price changes – peaked in January at 199,000 and is now down to 181,000. The 18,000 decline in only three months is the fastest reduction on record.
While the new home sales remain at a very weak level, today’s better-than-expected report has provided a bullish catalyst for a market coming off a bad week last week.
New Residential Sales data for May 2008 will be released on Wednesday, June 25 2008, at 10:00 A.M. EDT.