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New
home sales dropped 4.7% to a seasonally adjusted annual rate of
634,000 units last month, the Commerce Department's Census
Bureau said on Thursday. The sales pace for March was revised
lower to 665,000 units from the previously reported 693,000
units.
Economists polled by Reuters had forecast new home sales, which
account for more than 10% of U.S. home sales, would fall to a
rate of 679,000 units. Sales plunged 20.9% in the Northeast and
7.3% in the West. They fell 4.8% in the densely populated South
but increased 10.0% in the Midwest.
New home sales are counted at the signing of a contract, making
them a leading indicator of the housing market. They, however,
can be volatile on a month-to-month basis.
Sales declined 7.7% on a year-on-year basis in April. Builders
have been constructing smaller homes and giving incentives to
buyers to offer some cushion from higher mortgage rates. That
contributed to residential investment growing at its fastest
pace in more than three years in the first quarter.
The average rate on the popular 30-year fixed-rate mortgage
increased through April, pushing back above 7%, data from
mortgage finance agency Freddie Mac showed.
The run-up in mortgage rates has sapped momentum from the
housing market. The National Association of Realtors on
Wednesday reported a drop in existing home sales in April, while
government data last week showed single-family housing starts
and building permits fell last month. Homebuilder confidence
deteriorated considerably in May.
The median new house price increased 3.9% to $433,500 in April
from a year ago. Most of the new homes sold last month were in
the $300,000-$499,999 price range.
There were 480,000 new homes on the market at the end of April,
up from 470,000 units in March. At April's sales pace it would
take 9.1 months to clear the supply of houses on the market, up
from 8.5 months in March.
(Editing by Paul Simao)
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