New Home Sales Set Record Pace In April

Sales of newly built single-family homes set an all-time record pace for the second month in a row in April, nudging up to a seasonally adjusted annual rate of 1.32 million units, according to figures released by the U.S. Commerce Department. This was 0.2 percent higher than the revised record sales pace set in March, and 13.3 percent above the April 2004 pace.

“The drive for homeownership is as strong as or stronger than ever and builders don’t see this demand diminishing anytime soon,” said David Wilson president of the National Association of Home Builders (NAHB) and a custom home builder from Ketchum, Idaho. “We definitely don’t expect to be taking summer vacations this year.”

“The housing market is still decidedly on the move,” said NAHB Chief Economist David Seiders. “Buyer demand continues to be boosted by a strong economy and favorable market fundamentals, a mortgage rate structure that remains low and stable, growing employment and increases in household income and new household formations.

“At the pace we have been maintaining through the first part of the year, we expect new-home sales this year to challenge last year’s record sales,” Seiders added.

Two of four regions across the country posted higher home sales in March. Sales were up 37.2 percent in the Northeast and 2.8 percent in the West. Sales dipped 0.5 percent in the Midwest and 5.3 percent in the South from the month before.

The inventory of new homes for sale was 440,000, a 4.1 months’ supply at the April sales pace. “The inventory situation is very manageable. Many of the homes included are under construction and not yet completed and a significant portion haven’t been started yet,” Seiders said. “Builders are intentionally keeping their inventories lean in anticipation of increased mortgage rates later this year, and because a limited amount of land is available for building in many areas.”