Published: Wed, May 24, 2017
Economy | By Melissa Porter

Home sales fall 11.4% in April

Home sales fall 11.4% in April

Sales of new single-family houses fell to an annual rate of 569,000, seasonally adjusted, an 11.4 percent drop from March. "This month's drop in home sales and the stagnation in new-home inventory will continue to exacerbate the national inventory shortage, which will result in even higher prices and lower affordability". Sales for the prior month were revised sharply upward to 642,000 - the highest level since October 2007.

"How many new home sales do we need for the market to look normal?" New home sales dropped 11.4 percent sequentially to 569k, as compared with consensus expectations of 610k.

Analysts had been expecting a drop of only 5.8 percent in the latest month.

After reporting an unexpected jump in USA new home sales in the previous month, the Commerce Department released a report on Tuesday showing a substantial pullback in new home sales in the month of April. There were more new homes available for sale at the end of the month than at any time since 2009, Commerce said Tuesday.

Shrinking labor market slack, marked by a 4.4 percent unemployment rate, is improving employment opportunities for young Americans, helping to underpin demand for housing.

Regionally, new home sales decreased 4.0% in the South, 7.5% in the Northeast, 13.1% in the Midwest and 26.3% in the West. The housing market is also being supported by historically low mortgage rates. "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".

This after home builders broke ground on fewer new construction projects for the second straight month. Our role as an independent, fact-based news organization has never been clearer.

Housing demand has remained sturdy, and the pace of construction, particularly for lower-priced and starter homes, hasn't been keeping up.

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