New Home Sales Rebound in April
While the report for March showed weak growth, April gained momentum and is showing a strong start for the spring season. The Commerce Department released estimates last Friday showing sales of new single-family homes rising 6.4 percent over those in March.
Mark Vitner, senior economist and managing director at Wells Fargo, cited better weather following a long winter as a potential reason for this increase in sales. He pointed out that sales in the Midwest rose 47.4 percent from March to April. The South saw a small increase in sales at 3.1 percent month over month, while sales in the Northeast dropped by 26.7 percent.
Looking at new home sales in 2013, this year has seen a decrease of 4.2 percent. Analysts predict the spring season being milder than last year when home prices were more affordable and mortgage rates were relatively low. “We were hoping we’d be a lot better than we were a year ago, so there’s a lot of disappointment, but we have to have stronger job growth than we’ve had,” Vitner said. “I think when we get the May numbers, we’ll be back even or slightly ahead.”
As reported by The Commerce Department, the median price of new houses sold in April was $275,800 and the average price was $320,000. This is $6,000 and $6,600 lower than in March, respectively.