The sale of new homes fell 1.5 percent in April to 662,000 against 672,000 new homes sold in March 2018 according to the latest data on new home sales released by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development on Wednesday.
Despite the downward revision, new home sales remained strong compared to last year and were up 11.1 percent from 593,000 new home sales recorded during the same period in 2017. Home prices too saw an increase month over month, with the median sales price of new houses sold in April 2018 recorded at $312,400, whereas the average sales price stood at $407,300 during the month.
“Prices were driven up by a surge in sales of homes over $750,000 to 10 percent of sales, the highest ever, from 4 percent in March,” said Tendayi Kapfidze, Chief Economist, LendingTree. “There seems to be no reason for this and it will likely be revised. The previous high was 7 percent and the three-year average is 5 percent.”
The fall in monthly sales of new homes was led by the western region which saw a month-over-month decrease of 7.9 percent. “Notably, March sales in the west were also revised down significantly to 191,000 from an initially reported 222,000 which had been the highest level since December 2006 and we described as bizarre,” Kapfidze said.
The new home sales data released by the Census Bureau indicated that the seasonally adjusted estimate of new houses for sale at the end of April was 300,000 representing a supply of 5.4 months at the current sales rate.
According to Danielle Hale, Chief Economist for Realtor.com, the number of homes for sale hit the highest number in nine years. “At the same time, the typical new home has been for sale 3.8 months since completion which is a stark contrast to the existing home market, where the typical home was on market for only 59 days in April according to realtor.com data,” Hale said.
Explaining that this differential was partially a reflection of the higher price point of new home sales where the median price has reached $312,400, Hale said that half of the new homes sold above this price.
Quarterly data by LendingTree also foretells an encouraging trend for new home sales. “At LendingTree, we prefer the three-month average to balance timeliness with information value. The three-month average of 664,000 is at the highest level since the financial crisis and encouraging for further growth,” Kapfidze said.