Experts Surprised as New Home Sales Rise in April
The federal government reported Tuesday that the sales of new single-family homes unexpectedly rose in April.
The Census Bureau and the Department of Housing and Urban Development announced in a media release that the seasonally adjusted annual rate of sales of new houses in April was 623,000.
“This is 0.6 percent (±14.9 percent) above the revised March rate of 619,000, but is 6.2 percent (±17.1 percent) below the April 2019 estimate of 664,000,” the media release read.
Economists told Reuters they had predicted that new home sales would drop 21.9 percent to 480,000 units in April because of the coronavirus pandemic’s effect on the economy.
The median sales price of new houses in April was $309,900, according to the media release.
Zillow Research reported “the unexpected strength in April new home sales may be the first pleasant surprise” that has come out of the coronavirus pandemic.
April’s data is “the clearest indicator so far that housing, so unlike the last time around, will be a source of relative strength during this downturn,” Zillow economist Matthew Speakman said.
Applications for mortgages also grew over the past month in the midst of record-low interest rates.
“A 5% monthly drop in new home prices points to builders eager to make deals and deliver for the critical middle segment of the market,” Speakman reported.
New home sales account for about 10 percent of total housing market sales.
“There is still a ways to go before we’re completely out of the woods, but today’s report is a huge step in the right direction,” Speakman wrote.
Builders have also reported stronger demand for new houses, Another Billionaire reported.
“The April knowledge for brand new house gross sales present the potential for housing to steer any restoration for the general economic system,” said Dean Mon, chairman of the National Association of Home Builders.
“As a result of the housing business entered this downturn underbuilt, there exists appreciable pent-up housing demand on the sidelines. The expertise of the virus mitigation has emphasized the significance of house for many people.”
The chief funding officer at Bleakley Advisory Group said some of the new home sales could come from people stuck in cities shut down by the coronavirus who are leaving those cities.
“Backside line, contemplating a nearly full shutdown of the U.S. economic system in April, it is fairly shocking to see gross sales maintain up in addition to they did,” CFO Peter Boockvar said.
“Possibly it is folks fleeing the cities or no matter and a median house worth of $309,900, the bottom since July 2019.”
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