New-Home Sales Soar 16 Percent
By JEFF BATER, The Wall Street Journal
WASHINGTON (May 24) - New-home sales soared in April, an unexpected surge marking the biggest climb in 14 years, according to a report that showed declining inventories and signaled hope for the long-suffering housing sector.
Separately, demand for expensive goods rose mildly in April, according to a government report Thursday that also showed capital spending by businesses grew again.
Sales of single-family homes increased for the first time in four months, rising by 16% to a seasonally adjusted annual rate of 981,000, the Commerce Department said Thursday. March new-home sales decreased 1.4% to an annual rate to 844,000, a figure revised down from an earlier estimated 858,000. Sales fell 3.8% in February and 13% in January. Year-to-year, new-home sales were 11% lower than the level in April 2006.
The average price of a home last month decreased to $299,100, down from $324,700 in March and $310,300 in April 2006. The median price was $229,100, lower than $257,600 in March and $257,000 in April 2006.
The surge in April sales was a surprise. The median estimate of 25 economists surveyed by Dow Jones Newswires was a 0.2% increase in April sales to an 860,000 annual rate. It was the biggest increase since 16.4% in April 1993.
Going forward, the subprime mortgage market mess is expected to restrain sales. The Federal Reserve's latest quarterly survey of banks' senior loan officers, conducted in April and released last week, showed lenders tightened standards on subprime and non-traditional mortgages. Analysts expect tighter standards will lower the number of mortgages approved and keep sales depressed.
Regionally last month, new-home sales rose 3.8% in the Northeast, 8.5% in the West, and 28% in the South. Sales fell 4.0% in the Midwest.
There were an estimated 538,000 homes for sale at the end of April, representing a 6.5 months' supply at the current sales rate. In March, an estimated 546,000 were for sale, an 8.1 months' inventory.
An estimated 92,000 homes were actually sold in April, up from 81,000 in March, based on figures not seasonally adjusted.
2007-05-24 17:15:38 |
