Not sure what to make of this story in the context of the overall housing market, but new home sales were up over 16% in April, versus expectations of 0.2%. It looks like a sharp decline in prices has jumpstarted the market at least for the short term. Also, it is important to remember that new homes are only about 15% of overall real estate activity.
New homes sales rise 16.2 percent in April
Reuters
WASHINGTON (Reuters) - Sales of new homes rose 16.2 percent in April, the sharpest climb in fourteen years, while prices fell a record 11 percent, according to a government report on Thursday that showed home builders taking extraordinary steps to move houses. New single-family home sales rose to an annual rate of 981,000 units from a revised rate of 844,000 in March, the Commerce Department said. Analysts polled by Reuters were expecting April sales to rise to an 860,000 unit pace from a previously reported rate of 858,000 units in March. In April, the median sales price of a new home fell $28,500 to $229,100 from $257,600 in March. There were 538,000 new homes for sale in April, a fall from the 546,000 reported in March. It would take 6.5 months to clear that inventory at the current sales pace, less than the 8.1 months recorded in March. Thursday's data comes a day ahead of another key report that measures the pace of existing home sales -- which represent 85 percent of the housing market. Analysts polled by Reuters are expecting April existing home sales to rise to 6.14 million unit pace from the 6.12 million in March when that data is released Friday. Sales were mostly up across the regions, with the South recording the largest gain at 27.8 percent. The Midwest saw a decline of 4.0 percent while the Northeast was up 3.8 percent and the West was up 8.5 percent.
Thursday, May 24, 2007; 10:30 AM
