Interest Rate Roundup

Tuesday, May 27, 2008

April new home sales rise, but ...

We just got the latest new home sales figures for the month of April. Here's what they showed:

* Sales rose 3.3% to a seasonally adjusted annual rate of 526,000 in April from 509,000 in March. However, March's figure was downwardly revised from a previous estimate of 526,000. The government also shaved its estimates of the previous few months' worth of home sales (by 3,000 in February, for instance, and 10,000 in January). From a year earlier, sales plunged 42%.

* I have consistently noted that the one bright spot in the new home side of the market is the steady decline in the number of homes for sale. That trend continued into April, with the number of homes on the market slipping 2.4% to 456,000 from 467,000 in March. Supply is also down 17% from a year earlier. The "months supply at current sales pace" indicator of inventory improved slightly as well -- to 10.6 from 11.1 a month earlier.

* The median price of a new home rose 9.1% to $246,100 from $225,500 in March. Prices were also up 1.5% from a year earlier, the best showing since November (+3.7%).

Bottom line -- The April numbers look better in comparison to some of the housing market readings we've seen recently. But considering that March showed the biggest year-over-year price decline for new homes since 1970 ... and that March was the worst sales month since 1991 ... a little bounce back was to be expected.


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