New U.S. single-family home sales rose 7.3 percent in April to notch their second straight month of gains; and prices increased, according to a government report released June 1, offering some hope for the stagnant housing market.
The news was a surprise to many market watchers.
The Commerce Department said sales increased 7.3 percent to a seasonally adjusted 323,000 unit annual rate, the highest level since December, from a slightly upwardly revised 301,000-unit pace in March.
Economists polled by Reuters News had forecast new home sales unchanged at a previously reported 300,000-unit rate.
All four regions recorded gains in sales, with the West reporting a 15.1 percent rise. However, compared to April last year sales were down 23.1 percent.
“It’s a positive surprise,” Richard Dekaser, Economist with the Parthenon Group of Boston told Reuters. “The inventory of homes is at extreme scarce levels against the backdrop of a glut of existing homes. This is auguring well for future building activity. When does this happen? It’s already happening, but you need a microscope to discern.”
Many experts point out that the gains over March may reflect a pop after bad weather at the end of the first quarter. Still, many find it to be a hopeful sign.
“It’s a good number, better than expected. It suggests maybe we’re beginning to see some signs of stabilization in housing, but it’s too early to say we’ve bottomed out,” Gary Thayer, Chief Macro Strategist for Wells Fargo Advisors in St. Louis told Reuters. “We still have a lot of existing homes for sale and that excess inventory is likely to hang over the new home market for the better part of a year.”Share