April Home Sales Best This Year

April Home Sales Best This Year

Sales of newly built, single-family homes rose 7.3 percent to a seasonally adjusted annual rate of 323,000 units in April, their best pace since December of 2010, according to figures released by the U.S. Commerce Department. The report also showed that the nationwide inventory of new homes for sale continued to fall to just 175,000 units in April, which is a new record low.

"The fact that new-home sales have now risen for two consecutive months is certainly welcome news following an all-time low sales number in February," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, NV. "That said, builders are still contending with a great deal of competition from foreclosed properties for sale in certain markets, and in places where this is not an issue, it remains extremely difficult to obtain credit to build new homes."

"While more buyers are starting to show up at builder sales offices this season, the level of actual buying activity remains quite low," said NAHB chief economist David Crowe. "The razor-thin inventory of new homes for sale is indicative of the caution that builders are exercising with regard to new projects as well as their inability to obtain financing for new-home production."

New-home sales posted gains in every region in April. The Northeast registered a 7.7 percent gain, while the Midwest posted a 4.9 percent gain, the South posted a 4.3 percent gain and the West posted a 15.1 percent gain.

Meanwhile, the inventory of new homes for sale continued downward, falling 2.8 percent to 175,000 units in April – a new record low. This represents a 6.5-month supply at the current sales pace.