New-home sales surge bodes well for market
May 24, 2012 – More good news for the housing market arrived Wednesday with the release of April’s stronger-than-expected new-home sales data, and NAFCU expects more steady progress ahead.
The U.S. Census Bureau reported Wednesday that new-home sales in April increased by 3.3 percent to 343,000 units on an annualized basis. “The data, which arrived one day after the release of April’s encouraging existing-home sales numbers, indicate that housing may finally make a positive contribution to overall economic growth for the first time in five years,” said NAFCU Chief Economist David Carrier.
NAFCU Staff Economist Curt Long pointed out that, as with April’s existing-home sales numbers, gains were widespread. “Sales in three of the four housing regions reported increases,” he said. “The numbers provide further evidence that housing affordability and job growth has spurred demand among homebuyers.”
On a year-over-year basis, new-home sales were up 9.9 percent. All four housing regions reported increases from April 2011. Long said the year-over-year data “illustrate how much progress has been made, even as the current sales pace is still well below pre-recession levels.”
The months of available inventory fell from March’s level of 5.2 months of supply to 5.1 months in April. At the same time, the number of unsold homes left on the market increased from 144,000 in March to 146,000 in April. The number of unsold homes was down 16.1 percent on a year-ago basis.
The median new-home price, non-seasonally adjusted, rose 0.7 percent to $235,700 on a monthly basis and 4.9 percent from a year ago. “Since last August, the median sales price has climbed over 7 percent, with sales up over 17 percent during that time,” noted Long.
While the housing market is still well below healthy levels, NAFCU is anticipating a positive contribution to overall economic growth for the first time since 2005. “The market for new homes should continue to look healthier as the year progresses,” Long added.
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