New Home Sales Jump In April

According to figures released on Thursday by the Department of Housing and Urban Development and the U.S. Census Bureau, new house sales in April showed the first improvement of the year, and a substantial one at that.

Last December new house sales were at a seasonally adjusted annualized rate of 1,019,000 units. There was a precipitous drop in January to 890,000 units and each subsequent month has seen fewer new home sales. In April, however, new homes sold at an annualized rate of 981,000 units, a 16.2 percent increase over revised figures for April. April 2007 sales, however, were still 10.6 percent below sales figures for the same period one year ago.

The improvement was not countrywide. Sales in the Midwest were 4 percent below March numbers and down 28.1 percent from one year ago. The Northeast improved by 3.8 percent and the West by 8.5 percent. The big winner, however, was the South which saw a 27.8 percent improvement although sales were still 3.4 percent below those of one year ago.

The inventory of available homes also improved markedly. There is currently a supply of 538,000 homes on the market which, at the present rate of sales, will take 6.5 months to be absorbed. In March that figure was 8.1 months. One year ago there was a 6.2 months supply.

The median sales price of the new homes going under contract in April was $229,100 and the average price was $299,100. The median and average prices in March were $257,600 and $324,700 respectively. In April 2006 the prices were $257,000 and $310,300.

The 92,000 houses sold in April (these are preliminary actual figures, not annualized) were almost exactly divided among houses for which ground had not yet been broken, houses that were under construction, and houses that were completed at the time the contract was signed. Of the 532,000 homes still on the market only 83,000 are planned for construction while 274,000 are being built and 175,000 are completed. The average marketing time for the houses sold was 6 months. In April of 2006 new construction took 3.9 months to sell from the time the property was first marketed.

The National Association of Realtors® is expected to release figures for April sales of existing homes at the end of the week.