By: Maggie McGrath

What a difference a month — and a change in weather — can make: a new report shows that after plunging 11.4% in March, new home sales rebounded in April, rising nearly 7% in the first full month of spring and jumping 26% over sales reported in April of last year.

According to a report released Tuesday morning by the U.S. Department of Commerce (and compiled using data from the Census Bureau and the Department of Housing and Urban Development) sales of newly-constructed single-family homes reached an annual rate of 517,000 in April, a figure that marks a 6.8% rise over sales in March (which were revised to a seasonally-adjusted rate of 484,000 homes) and growing an impressive 26% over the 410,000 rate reported for April of 2014.

The April sales rate beat the analyst consensus compiled by Bloomberg, which had called for a rate of 508,000. It’s also above 2014′s annual rate of 437,000, but some observers warned against getting too excited by Tuesday’s report.

“Even with the increase in sales over the previous two years, new home sales are still close to the bottoms for previous recessions,” economist Bill McBride (of the popular blog Calculated Risk) wrote in a note Tuesday morning. “The inventory of completed homes for sale is still low, and the combined total of completed and under construction is also low.”

McBride provided the following graph to illustrate his point:

New Home Sales vs. recessions since 1963. Source: Calculated Risk

New Home Sales vs. recessions since 1963.
Source: Calculated Risk

The Commerce Department report also revealed that the median sales price of new houses sold in April 2015 was $297,300, while the average sales price was $341,500. At the end of April inventory stood at 205,000, a figure that marks a 4.8-month supply at the current sales rate.

As FORBES’ Erin Carlyle has noted in the past, sales of new homes represent only about 10% of the housing market, as it tallies the number of newly-constructed homes with a committed sale each month. The small sample sizes means the report carries a margin of error of about 15%, and the data is usually revised three times. On Tuesday, for instance, March’s 481,000 rate was revised to 484,000 while February’s rate was revised from 543,000 to 538,000.

Given these revisions – plus adjustments that were made to sales numbers in 2014 – here’s a look at the last twelve months of new home sales numbers, annualized and seasonally adjusted:

April 2015: 517,000
March 2015: 484,000 (revised)
February 2015: 538,000 (revised)
January 2015: 521,000 (revised)
December 2014: 495,000 (revised)
November 2014: 449,000 (revised)
October 2014: 472,000 (revised)
September 2014: 459,000 (revised)
August 2014: 454,000 (revised)
July 2014: 403,000 (revised)
June 2014: 408,000 (revised)
May 2014: 457,000 (revised)
April 2014: 410,000 (revised)

For a steadier measure of the housing market, check out the National Association of Realtors’ existing home sales figures, which tracks a larger portion of the market (previously-owned homes) and historically has shown less volatility in its numbers. The most recent NAR report, released last week,showed that sales fell 3.3% in April on short inventory. The tight supply pushed prices higher, though, with 40% of previously-owned homes selling at or above their asking price.

Posted by Tori Lockard on
Email Send a link to post via Email

Leave A Comment

Please note that your email address is kept private upon posting.