Sales of new houses dropped in April from an 11-year high in March, according to a report from the Census Bureau and the Department of Housing and Urban Development.
New-house sales fell 6.9% to a 673,000 annualized pace last month from March’s upwardly revised rate of 723,000. Even with the decline, April’s level sits 7% higher than a year ago.
While the headline figures are disappointing, the decline in new home sales does not mean the overall housing market is cooling, said Zillow Economic Analyst Matthew Speakman.
“The strong reading from March greatly exceeded expectations and was revised upward today; without that revision, April’s month-over-month decline would be just 2.7% – and the underlying trend in sales remains strong,” Speakman said. “Builders are finding ways to deliver homes despite expensive land and labor prices, a boon to buyers thirsty for more supply.”
A strong showing of housing starts last week point to a healthy spring market, he said.
“Strong builder confidence was borne out by last week’s encouraging home starts figures, which suggest that the supply of new homes is poised for growth,” Speakman said. “This strength, combined with enduring low mortgage rates and a historically strong job market, suggest that today’s reading is just a slight step back in the continued recovery of new home sales.”
The median sales price of new homes sold was $342,200 and the average sales price was $393,700. The seasonally adjusted estimate of new homes for sale by the end of the month was 332,000 in April, representing a supply of 5.9 months at the current sales rate.
