New-Home Sales Face a Setback
Sales of newly built single-family homes plunged 11.4 percent in April to a seasonally adjusted annual rate of 569,000 units, the first time such sales have decreased this year, the Commerce Department reported this week. Still, builders are writing off the dip as a minor setback, instead focusing on the bigger picture.
“Despite some slowness this month, total new-home sales in 2017 are up more than 11 percent from this time last year, and builders are optimistic about future market conditions,” says Granger MacDonald, chairman of the National Association of Home Builders.
New-home inventories were at 268,000 in April, which is a 5.7-month supply at the current sales pace. The median sales price of new homes sold in April was $309,200.
The West posted the biggest month-over-month drop in new-home sales, decreasing 26.3 percent month-over-month. The Midwest saw new-home sales drop by 13.1 percent, the Northeast saw a 7.5 percent decrease, and the South saw a 4 percent drop.
“New-home sales were strong in the first three months of 2017, so some pullback in April is to be expected,” says NAHB Chief Economist Robert Dietz. “However, our forecast calls for new-home sales to increase throughout the year, buoyed by rising household formations, continued job growth and tight existing-home inventory.”
Source: National Association of Home Builders