The price of a new single-family home soared to a record high in April as sales jumped 2.3 percent to a seasonally adjusted annual rate of 454,000, the ""Census Bureau and HUD"":http://www.census.gov/construction/nrs/pdf/newressales_201304.pdf reported Thursday.[IMAGE]
Economists surveyed by Bloomberg expected April sales to increase to 425,000 from March's originally reported 417,000. March sales were revised to 444,000.
The median price of a new home, according to the Census/HUD report, soared $20,900 (8.3 percent) in April to $271,600, the highest price on record.
The inventory of homes available for sale rose to 155,000--the highest level since November 2011--translating to a 3.5 month supply, matching March for a record low.
The Census/HUD report for April also included data revisions back to January 2011, which showed a slight increase in home sales as defined for this report. The monthly average for the 28-month period increased from the originally reported 347,000 to 353,000 with the revisions. The average median price went from $235,348 to $237,043. The report tracks contract signings--not closings.
Both the boost in sales and the sharp increase in prices were consistent with the improvement in ""builder confidence"":https://themreport.com/articles/builder-confidence-shows-first-2013-gain-2013-05-15 reported last week by the National Association of Home Builders (NAHB). NAHB├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós Housing Market Index increased in May for the first time this year.
The average price of a new home increased a staggering $44,100 in April (or 15.4 percent) to $330,800, also a record high. The Census/HUD report has been tracking median prices since January 1963 and average prices since January 1975.
Both the absolute dollar and percentage increase in the median price were the largest monthly gains since December 2010, when prices rose $21,600, or 9.8 percent.
The month-over-month dollar and percentage increase in the average price were the highest on record.[COLUMN_BREAK]
In the last year, the median price of a new home was up $35,200, or 14.9 percent. The average price has increased $42,900 (also 14.9 percent) in the same period.
The increase in the median and average prices of new homes was driven by a change in the mix of homes sold in April. Homes with price tags under $300,000 represented 58 percent of April sales, down from 67 percent in March. Homes prices at $400,000 or more represented 24 percent of April sales, up from 13 percent in March.
The boost in sales for lower-priced homes could mean more construction activity for more expensive homes with fewer builder incentives.
Regionally, sales improved month-over-month in April in two of the four Census regions: up 12,000 in the West to 123,000 and up 7,000 in the South to 242,000. Sales fell 6,000 to 30,000 in the Northeast and 3,000 in the Midwest to 59,000.
The sharp increase in prices coupled with the drop in inventory could spark a new round of housing starts with the prospect of increased construction employment, especially as the weather becomes more favorable. That said, recent data on housing permits and starts show a decided shift in preferences as housing starts tilt to multifamily from single-family.
In its latest report on ""housing permits and starts"":https://themreport.com/articles/housing-starts-drop-despite-improved-builder-confidence-2013-05-16, Census and HUD said 60.7 percent of permits were for single-family homes--the lowest since last September--and while total permits increased 127,000 in April, multi-family permits accounted for 109,000, or 85.8 percent. Total housing starts fell with single-family starts dropping to the lowest level since November.
The report on permits and starts also showed builders completed 536,000 single-family homes in April, 82,000 more than they sold. While completions typically exceed sales, the ""gap"" was the smallest since February 2012.
The government report on new homes came on the heels of the report Wednesday from the National Association of Realtors (NAR) that ""existing-home sales"":https://themreport.com/articles/existing-home-sales-prices-jump-to-multi-year-highs-2013-05-22 rose a 0.6 percent in April to an annual sales rate of 4.97 million, the highest level since November 2009. The median price of an existing single-family home jumped $8,900 in the month to $192,800, the highest since August 2008. The inventory of existing homes for sale rose to the highest levels since last September.
The NAR report tracks closings. The report on pending existing home sales for April will be released next Thursday.
_Hear Mark Lieberman every Friday on P.O.T.U.S. radio, Sirius-XM 124, at 6:20 a.m. Eastern._