More buyers frustrated with the limited number of existing homes turned to builders for relief in April. Sales growth is notably rising in the $200K-$400K range.
WASHINGTON – Sales of newly built, single-family homes increased 4.1% to a 683,000 seasonally adjusted annual rate in April. That’s up from a downwardly revised reading in March, according to new data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. It’s the highest level of new-home sales since March 2022.
“A lack of existing (home) inventory supported sales of newly-built, single-family homes in April,” says Alicia Huey, chairman of the National Association of Home Builders (NAHB). “Even more encouraging, we’re seeing sales growth in the more affordable price ranges of $200,000 to $400,000.”
“April saw an increase … even as builders struggle to keep up with demand because of a shortage of distribution transformers and skilled construction workers,” adds NAHB Chief Economist Robert Dietz. However, “sales for 2023 thus far are still down 9.7% on a year-to-date basis due to elevated interest rates, and sales may weaken in the months ahead given the recent rise in interest rates.”
A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the April reading of 683,000 units is the number of homes that would sell if this pace continued for the next 12 months.
New single-family home inventory increased 0.2% in April and remained elevated at a 7.6-months’ supply at the current building pace. A measure near a 6-months’ supply is considered balanced.
However, the lack of resale, existing-home inventory means that overall inventory for the single-family market remains tight.
The median new home sale price fell in April to $420,800 – down 8% compared to a year ago.
In general, the April report found growth in the lower price ranges, with 9,000 sales in the $200,000-$299,999 price range compared to just 4,000 sales a year prior. The $300,000-$399,999 price bracket grew by 14,000 sales in that same timeframe.
Regionally, on a year-to-date basis, new home sales fell in all regions, down 19.2% in the Northeast, 9.8% in the Midwest, 0.7% in the South and 27.5% in the West.
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